Goal: Find the Return Rate (IRR) of a project.
IRR is the interest rate where the Initial Investment perfectly balances the Future Returns (NPV = 0).
-100
COST
Returns
VALUE
0.0%
Ready...
💻 Formula Structure
=IRR(values, [guess])
1. Values: A range of cash flows (e.g., B2:B5). Must include at least one negative (cost) and one positive (profit).
2. Guess: (Optional) A starting estimate (default 10%).
-- Calculate Internal Rate of Return
=IRR( C2:F2 )
Project IRR:
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⚠️ Common Pitfalls
🚫 Missing Initial Cost
IRR needs a negative number first to represent the investment. If all numbers are positive, it returns a #NUM! error because you can't calculate a return on nothing.
📅 Regular Intervals
IRR assumes cash flows happen at regular intervals (yearly/monthly). If dates are irregular (e.g., Jan 1, Feb 15, Dec 10), use XIRR instead.