Using Microsoft Excel: Finding the IRR using Excel is fairly straighforward. 1. First, type the intial cash flow into any cell on the spreadsheet. Keep in mind this initial investment has to be a negative number. Using our original example, type -500 into the A1 cell of the spreadsheet. 2. Next, just like the calculator, you will type the subsequent cash flow values for each period into the cells directly under the initial investment amount. Following our example, type 100 into cell A2, 200 into cell A3, and 300 into cell A4. 3. Finally you are ready to calculate the IRR. To instruct the Excel program to calculate IRR, type in the function command =IRR(A1:A4) into the A5 cell directly under all the values. When you hit the enter key, the IRR value, 8.2%, should be displayed in that cell. This same procedure can be followed for any data set if the cash flow values are listed one after another in a column directly under the intial investment amount. You would then put the range of cells in between the parentheses of the IRR command function.
Posted on: Tue, 09 Sep 2014 14:29:58 +0000
Trending Topics
Recently Viewed Topics
© 2015