What is the IRR function in Excel?

Excel for Microsoft 365 Excel for Microsoft 365 for Mac Excel for the web More... This article describes the formula syntax and usage of the IRR function in Microsoft Excel. Returns the internal rate of return for a series of cash flows represented by the numbers in values. These cash flows do not have to be even, as they would be for an annuity.

What are NPV and internal rate of return (IRR)?

There are two financial methods that you can use to help you answer all of these questions: net present value (NPV) and internal rate of return (IRR). Both NPV and IRR are referred to as discounted cash flow methods because they factor the time value of money into your capital investment project evaluation.

What is the difference between IRR and XIRR?

The IRR function calculates the internal rate of return for a series of cash flows, the MIRR function works with interest rates for borrowing and investing, and the XIRR function calculates a more accurate internal rate of return as it considers time periods.

What happens if IRR gives a 'NUM' error value?

If IRR gives the #NUM! error value, or if the result is not close to what you expected, try again with a different value for guess. IRR is closely related to NPV, the net present value function. The rate of return calculated by IRR is the interest rate corresponding to a 0 (zero) net present value.