Calculates the internal rate of return of a series of future cash flows.
The second parameter is an optional guess at the IRR for use when multiple solutions exist.
To arrive at a solution there must be both negative and positive cash flows. Normally the initial investment is entered as a negative number for cash flow out and the returns entered as cash flow in. Since the formula for IRR is iterative, there may be multiple solutions. In that case a guess of the rate can be entered and the program will choose the solution closest to the guess.
sets an initial guess at 10% per period.
IRR using dates
Calculates the internal rate of return of a series of cash flows based on the transactions occurring on specified dates.
IRR(Cashflow, Dates, Transactions, Guess)
- Cashflow: Numeric cash values. Must have at least one negative and one positive value.
- Dates: The date of each transaction
- Transactions: The name of the list containing the schedule of transactions.
- Guess: A guess at the IRR. For example enter a guess as 0.1 for a 10% IRR. In the event of multiple solutions to the IRR formula, the program will choose the solution closest to the guess.
The IRR result does not require a time dimension.
IRR is the iterative solution to the equation below:
- di is the number of days from the start of the first time period
- Pi is the payment in the ith period.
- N is the number of payments in and out over the entire timescale
- c: Cash flow: line item
- g: Estimate of Rate: number (optional)
IRR using dates
IRR(c, d, t, [g])
- c: Cash flow
- d: Dates
- t: Transaction List
- g: Estimate of Rate
|Input Format||Output Format|
t: List item
The function uses the following arguments:
- c: Cash flow: Numeric line item, property, or expression
- d: Date: Hard-coded date, date variable, or line item
- t: Transaction List: List-formatted line item
- g: Estimate of Rate: Numeric line item, property, or expression (optional)
The function has the following constraints:
- Cash flow parameter must have at least one negative and one positive value.
IRR = IRR(Cash Flow, 0.1)
IRR Using Dates
In the example shown, a series of cash transactions and the dates are entered in the module named Schedule. This module has a list named Transactions as one of its dimensions. The IRR and NPV are calculated for each project.