IRR

Basic and Crystal syntax.

Overloads
Arguments
Returns

Number value

Action

IRR returns a Number specifying the internal rate of return for a series of periodic cash flows (payments and receipts).

Example

The following example is applicable to both Basic and Crystal syntax:

Suppose that you can choose one of two offers: $20,000 now or guaranteed payments of $5,000 after 1 year, $10,000 after 2 years and $15,000 after 3 years. What is the better offer? One way to quantify this is to calculate the internal rate of return. If you take the second offer, you can't take the first so that is like experiencing an initial payment of $20,000 followed by the receipts:

Rem Basic syntax

formula = IRR (Array(-20000, 5000, 10000, 15000))


//Crystal syntax

IRR ([-20000, 5000, 10000, 15000])

Returns 0.194 (rounded to 3 decimals) or 19.4 percent interest. So all other things being equal, if you think that 19.4 percent is a good rate of return, you would prefer the second offer.

Comments


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