IRR as the Root of NPV: Newton vs Excel's IRR
This lesson is part of the course
In this lesson
You build a project's NPV profile, run Newton's method on the NPV with its exact derivative and land on the same IRR that Excel's IRR function returns.
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Lessons in this course
- Bisection with Error Bounds: Guaranteed Accuracy for a Break-Even Locked
- Newton-Raphson with a Numerical Derivative: the Rate Inside a Lease Locked
- The Secant Method: Bond Yield Without a Derivative Locked
- Fixed-Point Iteration: Circular Interest, Convergence and Divergence Locked
- Comparing Convergence Speed: Bisection, Newton, Secant & Fixed Point Locked
- IRR as the Root of NPV: Newton vs Excel's IRR Locked
- Trapezoid vs Simpson: Error vs Step Size and the Observed Order Locked
- Stopping Criteria and Floating-Point Limits Locked