Follow Along File- [ Ссылка ]
00:00 Intro to IRR function in Excel
00:11 Use the IRR formula
00:20 What cashflows MUST contain for IRR
00:29 What is the Guess option in IRR function
00:50 Assumed time periods of cash flow (equal periods)
01:18 Proof that IRR makes NPV equals zero
What does IRR mean- [ Ссылка ]
Recommended way- XIRR- [ Ссылка ]
Pros
Easy to use
Cons
Must be equal periods (rather use XIRR- [ Ссылка ])
The IRR function in Excel will automatically do what the Goalseek did ([ Ссылка ])
To follow along go to 17.11
As shown below, in this case (unlike NPV) you MUST include the first period which is an outflow (opposite sign to the rest of the cash flows). As part of the function you also have an option to put a guess. This is just to help Excel start its calculations.
IRR
IRR has similar constraints as the normal NPV function in that it must be equally spaced in time i.e. all cash flows must be EITHER monthly, quarterly etc and they cannot change from say monthly to quarterly.
