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Syntax
r = irr(cf)
Description
r = irr(cf)
calculates the internal rate of return for a series of periodic cash flows. cf is the cash flow vector. The first entry in cf is the initial investment. If the cash flow payments are monthly, multiply the resulting rate of return by 12 for the annual rate of return. This function calculates only positive rates of return; for negative rates of return, r = NaN.
Example
This cash flow represents the yearly income from an initial investment of $100,000:| Year 1 |
$10,000 |
| Year 2 |
$20,000 |
| Year 3 |
$30,000 |
| Year 4 |
$40,000 |
| Year 5 |
$50,000 |
r = irr([-100000 10000 20000 30000 40000 50000])returns
r =
0.1201 (12.01%)
See Also
effrr, mirr, nomrr, taxedrr, xirr
Reference
Brealey and Myers, Principles of Corporate Finance, Chapter 5