Manuals/calci/IRR

IRR(v,g)


  • is the array of values.
  • is the number is close to the result of IRR.

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.
  •   is similar to the net present value calculation.
  • In  ,  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.
  •   is the guess which is indicating the number that you guess is close to the result of  .
  •   must have atleast one positive and one negative value to find the internal rate of return.
  • The value of   can be array or reference argument contains text, logical values or empty cells, the values which are ignored.
  • The   value is optional, when we are omitting the   value,by default it will consider the value as 10%(0.1).
  • The calculation of   uses an iterative method.
  • The value is starting from g value and doing the calculation until the result is accurate within 0.00001%.
  • Also   can't find the result that works after 20 tries.
  • The calculating   for cash flows occurring at any other regular intervals like quarterly or semi annual by using respective factor.
  •   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

A B
1 -100000 -500000
2 10000 32000
3 28000 45000
4 20000 100000
5 32500 150000
6 59000 275000
7 1000 67000
  1. =IRR(A1:A6)=12.04%
  2. =IRR(A1:A5,20%) = 11.88%
  3. =IRR(B1:B7) = 7.31%%
  4. =IRR(B1:B5,5%)= -12.47%

See Also

References

Internal rate of return