A Predictive Model for Determining Internal Rate Return (Irr) Without Trial and Error

Planners are often confronted with challenges of evaluating proposed capital projects. The most popular tools are, inter alia 1 Net present value (NPV) 2 Benefit/ cost ratio and 3 Internal Rate of return (IRR) While the first two are straight forwardly determinable IRR on the other hand, requires a trial and error measures. Based on current literature. This is not only challenging in time consumption but presents enormous obstacle for financial advisors during brief sessions with the un-informed Business owners. The foretasted elicits is a need to develop a straight forward model to approximate IRR without the “TRIAL AND ERROR” Routine Methodology: The employment of ratio analysis and mathematical logic based on inductive reasoning determined that relationships exist among cost of capital, Benefit/cost ratio and IRR subsequently an Illustrative example on a capital project proved that the model espoused here in is useful.