The XIRR function takes into account the cash flows, the dates, and a guess of the IRR to instantly compute the internal rate of return. In this example, 0.2 -- 20% -- was used as the IRR estimate ...

The internal rate of return tells you how much a project or investment needs to make in order to break even, accounting for the cost of capital and the net present value of future cash flows.

Flip that definition around, and the IRR is the investment return percentage the future cash flow amounts provide on the amount of money invested in the project.

Internal rate of return (IRR) is one of several well-known formulas used to evaluate prospective investments, especially ones that generate cash flows, like in real estate.

Excel and Google Sheets have three functions to calculate the internal rate of return: IRR, XIRR, and MIRR. Learn how these functions can calculate investment returns.

Calculating the IRR for a project with an initial outlay and single cash flow is very easy to do. It's also very practical for measuring the returns.

Conventional cash flow is characterized by a series of cash transactions that include just one switch in how money moves, usually starting with funds leaving and later with funds coming in.

Internal rate of return (IRR) is one of several well-known formulas used to evaluate prospective investments, especially ones that generate cash flows, like in real estate.

3. Excel’s MIRR function. Excel’s MIRR function (modified internal rate of return) works similarly to the IRR function, except that it also considers the cost of borrowing the initial investment funds ...

One of the main disadvantages of the internal rate of return is that it assumes the reinvestment of positive cash flow at the IRR. It also doesn’t consider a project’s cost of capital or duration.

Using Excel to calculate IRR with unequal timing of cash flows In the chart below, we have management's estimation for the initial cost and cash flow returns for both the expansion and new ...

Using Excel to calculate IRR with unequal timing of cash flows In the chart below, we have management's estimation for the initial cost and cash flow returns for both the expansion and new ...