IRR
The IRR function returns the internal rate of return for a series of positive and negative cash flows. Node references are also accepted as arguments.
Syntax
IRR (values,Guess?) - > Number
Arguments
| Arguments | Datatype | Description |
|---|---|---|
values | Number, node reference | The node that contains the cash outflow and inflows for which you want to calculate the IRR. This is a required argument. |
Guess? | Number | A value that you guess is closest to the actual IRR value. This is an optional argument. |
Remarks
The argument should contain at least one positive and one negative value.
Example
Consider the below example of a project with an initial investment of $10,000 and cash inflows of $4,000 for the subsequent four years. The objective is to evaluate the project by calculating IRR.
| Periods | 0 | 1 | 2 | 3 | 4 |
|---|---|---|---|---|---|
Initial Investment | -10000 | - | - | - | - |
Cash Inflows | - | 4000 | 4000 | 4000 | 4000 |
To achieve this, the following formula should be written in the [IRR] node:
IRR([Initial Investment],[Cash Inflows].ALL_PERIODS)
We are including .ALL_PERIODS in the formula so that it takes the value of the entire year's cash inflow rather a single period.
Result
IRR | 21.86% |
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