writer
6,694
edits
Changes
Jump to navigation
Jump to search
Line 1:
Line 1: − + + + − + + + + + + + + + + + + + + + + − <font color="#000000"><font face="Arial, sans-serif"><font size="2">'''Where 'V''''</font></font><font face="Arial, sans-serif"><font size="2"> is an array or a reference to cells and 'E' is a number that you guess is close to the result of IRR.</font></font></font>+ − + − </div>+ − ----+ − <div id="1SpaceContent" class="zcontent" align="left"> <font color="#000000"><font face="Arial, sans-serif"><font size="2">This function returns the internal rate of return for a series of cash flows represented by the numbers.</font></font></font></div>+ − ----+ − <div id="7SpaceContent" class="zcontent" align="left"> + − + − * <font color="#000000"><font face="Arial, sans-serif"><font size="2">The following formula demonstrates how NPV and IRR are related:</font></font></font><font color="#000000"><font face="Arial, sans-serif"><font size="2">NPV(IRR(B1:B6),B1:B6) equals 3.60E-08 </font></font></font>+ − + − </div>+ − ----+ − <div id="12SpaceContent" class="zcontent" align="left"><div class="ZEditBox" align="left">+ − + − IRR+ − + − </div></div>+ − ----+ − <div id="8SpaceContent" class="zcontent" align="left"> + − + − <font color="#000000"><font face="Arial, sans-serif"><font size="2">Lets see an example,</font></font></font>+ − + − <font color="#000000"><font face="Arial, sans-serif"><font size="2">IRR(V, E)</font></font></font>+ − + − <font color="#000000"><font face="Arial, sans-serif"><font size="2">'''B'''</font></font></font>+ − + − <font color="#000000"><font face="Arial, sans-serif"><font size="2">-25000</font></font></font>+ − − <font color="#000000"><font face="Arial, sans-serif"><font size="2">10000</font></font></font> − − <font color="#000000"><font face="Arial, sans-serif"><font size="2">11000</font></font></font> − − <font color="#000000"><font face="Arial, sans-serif"><font size="2">14000</font></font></font> − − <font color="#000000"><font face="Arial, sans-serif"><font size="2">18000</font></font></font> − − <font color="#000000"><font face="Arial, sans-serif"><font size="2">20000</font></font></font> − <font color="#000000"><font face="Arial, sans-serif"><font size="2"><nowiki>=IRR(B2:B7) is 0.4259</nowiki></font></font></font>+ + + + − </div> − ---- − <div id="10SpaceContent" class="zcontent" align="left"><div class="ZEditBox" align="justify">Syntax </div><div class="ZEditBox"><center></center></div></div> − ---- − <div id="4SpaceContent" class="zcontent" align="left"><div class="ZEditBox" align="justify">Remarks </div></div> − ---- − <div id="3SpaceContent" class="zcontent" align="left"><div class="ZEditBox" align="justify">Examples </div></div> − ---- − <div id="11SpaceContent" class="zcontent" align="left"><div class="ZEditBox" align="justify">Description </div></div> − ---- − <div id="2SpaceContent" class="zcontent" align="left"> − {| id="TABLE3" class="SpreadSheet blue"+ − |- class="even"+ − | class=" " |+ − + − + − + − − |- class="odd" − | class=" " | Row1 − | class="sshl_f " | -25000 − | class="sshl_f" | 0.4259 − | class=" " | − | class=" " | − |- class="even" − | class=" " | Row2 − | class="sshl_f" | 10000 − | class=" sshl_f " | − | class=" " | − | class=" " | − |- class="odd" − | Row3 − | class="sshl_f" | 11000 − | class=" " | − | class=" " | − | class=" " | − |- class="even" − | Row4 − | class="sshl_f" | 14000 − | class=" " | − | class=" " | − | class=" " | − |- class="odd" − | class=" " | Row5 − | class="sshl_f" | 18000 − | class=" " | − | class=" " | − | class=" " | − |- class="even" − | Row6 − | class="sshl_f" | 20000 − | class=" " | − | class=" " | − | class=" SelectTD SelectTD" | − <div id="2Space_Handle" title="Click and Drag to resize CALCI Column/Row/Cell. It is EZ!"></div><div id="2Space_Copy" title="Click and Drag over to AutoFill other cells."></div> − − <div align="left">[[Image:calci1.gif]]</div></div>+ − ----
no edit summary
<div id="6SpaceContent" class="zcontent" align="left">
<div style="font-size:30px">'''IRR(v,g)'''</div><br/>
*<math>v</math> is the array of values.
*<math>g</math> is the number is close to the result of IRR.
<font color="#000000">'''<font face="Arial, sans-serif"><font size="2">IRR(V, E)</font></font>'''</font>
==Description==
*This function gives the internal rate of return of a cash flow stream associated with an investment.
*The Internal Rate of Return is the interest rate that makes the Net Present Value zero.
*<math>IRR</math> is similar to the net present value calculation.
*In <math>IRR(v,g)</math>,<math>v</math> is an values which is the array or a reference to cells that contain numbers for which you want to calculate the internal rate of return.
*<math>g</math> is the guess which is indicating the number that you guess is close to the result of <math>IRR</math>.
*<math>v</math> must have atleast one positive and one negative value to find the internal rate of return.
*The value of <math>v</math> can be array or reference argument contains text, logical values or empty cells, the values which are ignored.
*The <math>g</math> value is optional, when we are omitting the <math>g</math> value,by default it will consider the value as 10%(0.1).
*The calculation of <math>IRR</math> uses an iterative method.
*The value is starting from g value and doing the calculation until the result is accurate within 0.00001%.
*Also <math>IRR</math> can't find the result that works after 20 tries.
*The calculating <math>IRR</math> for cash flows occurring at any other regular intervals like quarterly or semi annual by using respective factor.
*<math>IRR</math> is also called effective interest rate, or rate of return.
*It is used to evaluate an investment or project.
*The function will return the result as error after the 20 tries in the iterative method.
==Examples==
{| class="wikitable"
|+1..10@SQRT
|-
! !! A !! B
! 1
|-
| -100000 || -500000
! 2
|-
| 10000 || 32000
! 3
|-
|28000 || 45000
! 4
|-
|20000 || 100000
! 5
|-
| 32500 || 150000
! 6
|-
| 59000 || 275000
! 7
|-
|1000 ||67000
|}
#=IRR(A1:A6)=11.88%
#=IRR(A1:A5,20%) = -3.45%
#=IRR(B1:B7) = 6.7%
#=IRR(B1:B5,5%)= -160.99%
==See Also==
*[[Manuals/calci/MIRR | MIRR ]]
*[[Manuals/calci/NPV | NPV ]]
| Column1
*[[Manuals/calci/RATE | RATE ]]
| class=" " | Column2
*[[Manuals/calci/XIRR | XIRR ]]
| Column3
*[[Manuals/calci/XNPV | XNPV ]]
| Column4
|}
==References==