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Trial and Error methods to calculate IRR may be tedious when the number of years is long. EXCEL can be used instead. You do not
Trial and Error methods to calculate IRR may be tedious when the number of years is long. EXCEL can be used instead. You do not need to do the calculation for this question but please indicate using the information below the condition that would need to be satisfied to obtain the IRR. (i) It costs 16,000 to train a nurse. Increasing this by 1000 in the same year would produce benefits estimated at 200 a year in years 1-20. Explain the condition that needs to be satisfied to get the IRR. [Hint: (a) what is the initial cost (b) write out the condition that NPV=0 and check which IRR satisfies this condition. (ii) Additional questions after you have finished calculation? Is the training justifiable on financial grounds? Did you need to know the 16,000 information?
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