Thread: >> IRR function

Hi, any ideas to resolve this one

A B
1 Amount IRR calc
2 $(33,756)
3 $19,578 -42%
4 $(19,074) #NUM!

in cell B4 is: =IRR(A2:A4)

I have tried using the optional guess argument. But
haven't figured out how to make a valid guess.

Any ideas or suggestions appreciated :-)

Thanks
Jonathan

Hi Jonathan,

there is no solution for the example you have mentioned below and so you get the #NUM error. IRR function assumes the cashflow you have given as
year == cashflow
0 == $(33,756)
1 == $19,578
2 == $(19,074)

If you tell us what answer you are expecting, someone could help.

- Mangesh

Jonathan -

IRR is the discount rate such that a sequence of cash flows has a net
present value equal to zero.

For your data, and for the timing implied by your Excel formula =IRR(A2:A4),
the cash flow at t=1 is $(33,756), at t=2 it's $19,578, and at t=2 it's
$(19,074). There is no finite discount rate that will give a net present
value of zero (at t=0).

- Mike

www.mikemiddleton.com

++++++++++++++++++++++++

"Jonathan Parminter" <anonymous@discussions.microsoft.com> wrote in message
news:1daa01c4f853$6c00c3e0$a501280a@phx.gbl...
> Hi, any ideas to resolve this one
>
> A B
> 1 Amount IRR calc
> 2 $(33,756)
> 3 $19,578 -42%
> 4 $(19,074) #NUM!
>
> in cell B4 is: =IRR(A2:A4)
>
> I have tried using the optional guess argument. But
> haven't figured out how to make a valid guess.
>
> Any ideas or suggestions appreciated :-)
>
> Thanks
> Jonathan

Thanks Mike...

Regards
Jonathan

>-----Original Message-----
>Jonathan -
>
>IRR is the discount rate such that a sequence of cash
flows has a net
>present value equal to zero.
>
>For your data, and for the timing implied by your Excel
formula =IRR(A2:A4),
>the cash flow at t=1 is $(33,756), at t=2 it's $19,578,
and at t=2 it's
>$(19,074). There is no finite discount rate that will
give a net present
>value of zero (at t=0).
>
>- Mike
>
>www.mikemiddleton.com
>
>++++++++++++++++++++++++
>
>"Jonathan Parminter"
<anonymous@discussions.microsoft.com> wrote in message
>news:1daa01c4f853$6c00c3e0$a501280a@phx.gbl...
>> Hi, any ideas to resolve this one
>>
>> A B
>> 1 Amount IRR calc
>> 2 $(33,756)
>> 3 $19,578 -42%
>> 4 $(19,074) #NUM!
>>
>> in cell B4 is: =IRR(A2:A4)
>>
>> I have tried using the optional guess argument. But
>> haven't figured out how to make a valid guess.
>>
>> Any ideas or suggestions appreciated :-)
>>
>> Thanks
>> Jonathan
>
>
>.
>