Internal rate of return · conventional flows
Internal rate of return · conventional flows: use initial cost followed by periodic inflows. Review the formula, worked example and calculation steps.
Inputs
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Formula & explanation
Find r such that Σ CFₜ/(1+r)ᵗ = 0
Variables & units
- Initial cost followed by periodic inflows
- comma separated
Worked example
−1,000 followed by 1,100 one period later gives IRR 10%.
Assumptions
Equal periods and one initial outflow only. Irregular dates, multiple sign changes and XIRR are not supported.
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