Learn how you can use the XIRR function to calculate the internal rate of return for cash flows that occur at irregular intervals.
- [Announcer] When you calculate a projects internal…rate of return, you find the discount rate,…that is the risk-free interest rate,…at which the project would have a net present value of zero.…One important restriction of the straight up…internal rate of return calculation is,…that all the cash flows must occur at regular intervals,…every year, every month, that sort of thing.…In this movie, I will show you how to calculate…the internal rate of return…of cash flows that happen on an irregular basis.…
As my sample file, I will use the IrregularIRR workbook,…and you can find that in the chapter two folder…of your exercise files collection.…To calculate the internal rate of return using…irregular return dates, you need to know…two different things, and a third argument…for the formula is optional.…The first thing you need to know, are your cash flows.…So you have the amounts here, in cells B4 through B11.…And you also need to know the dates…on which the cash flows occur.…
So here we have the first one, which is the investment,…
LinkedIn Learning (Lynda.com) is a PMI Registered Education Provider. This course qualifies for professional development units (PDUs). To view the activity and PDU details for this course, click here.
The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.
- Calculating the effect of interest rates and inflation
- Finding the arithmetic and geometric means of growth rates
- Calculating the future and present value of an investment
- Calculating loan payments for a fully amortized loan
- Calculating the effect of paying extra principal with each payment
- Finding the number of periods required to meet an investment goal
- Calculating net present value and internal rate of return
- Building a cash tracking worksheet
- Visualizing cash flows using a waterfall chart