Difference between revisions of "Manuals/calci/IRR"
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(Created page with "<div id="6SpaceContent" class="zcontent" align="left"> <font color="#000000">'''<font face="Arial, sans-serif"><font size="2">IRR(V, E)</font></font>'''</font> <font c...") |
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| − | <div | + | <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. | ||
| − | < | + | ==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 | |
| − | + | |} | |
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| − | + | #=IRR(A1:A6)=11.88% | |
| + | #=IRR(A1:A5,20%) = -3.45% | ||
| + | #=IRR(B1:B7) = 6.7% | ||
| + | #=IRR(B1:B5,5%)= -160.99% | ||
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| − | + | ==See Also== | |
| − | + | *[[Manuals/calci/MIRR | MIRR ]] | |
| − | + | *[[Manuals/calci/NPV | NPV ]] | |
| − | | | + | *[[Manuals/calci/RATE | RATE ]] |
| − | | | + | *[[Manuals/calci/XIRR | XIRR ]] |
| − | | | + | *[[Manuals/calci/XNPV | XNPV ]] |
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| − | + | ==References== | |
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Revision as of 03:40, 28 March 2014
IRR(v,g)
- is the array of values.
- is the number is close to the result of IRR.
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.
is similar to the net present value calculation.
,Examples
| 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%