linear interpolation

Show Summary Details

Quick Reference

A technique used in discounted cash flow for calculating the approximate internal rate of return of a project. The cash flows for the project are discounted at two discount rates to obtain a small positive and a small negative net present value. A linear relationship is assumed between the two results in order to calculate the discount rate that would give a net present value of zero.

Subjects: Accounting.

Reference entries

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.