Manuals/calci/IRR

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IRR (CashFlowEvents,StartGuess,Accuracy,NoOfIterations)


  • is the array of values.
  • is the number is close to the result of IRR.
  • is the correct of decimal places of the result.
  • is the number of iterations.
    • IRR(), returns the internal rate of return for a series of cash flows.

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)=11.88%
  2. =IRR(A1:A5,20%) = -3.45%
  3. =IRR(B1:B7) = 7.31%%
  4. =IRR(B1:B5,5%)= -12.47%

Related Videos

Internal Rate of Return

See Also

References

Internal rate of return