IRR

See also A-Z Spreadsheet Function List

Description Returns internal rate of return for a series of periodic cash flows.

Syntax IRR(cash_flow [, guess])

cash_flow is a reference to a range that contains values for which to calculate the internal rate of return. The values must contain at least one positive and one negative value.

During calculation, IRR uses the order in which the values appear to determine the order of the cash flow.

Text, logical values, and empty cells in the range are ignored.

guess is the estimate of the internal rate of return. If no argument is supplied, a rate of return of 10 percent is assumed.

Remarks The internal rate of return is the interest rate received for an investment consisting of payments (specified by negative numbers) and investments (specified by positive numbers).

IRR is calculated iteratively, cycling through the calculation until the result is accurate to .00001 percent. If the result cannot be found after 20 iterations, #NUM! is returned. When this occurs, supply a different value for guess.

See Also MIRR , NPV , and RATE functions

Examples In the preceding spreadsheet:

         IRR(B1:B6) returns 3.72%

         IRR(B1:B3, -20%) returns -49.26%