


tadIRR in tadXL v3.0
tadIRR in tadXL v2.5
Abraham's Transform
IRR  internal rate of return is the discount rate that brings down the net present value of an investment to zero. This turns out to be the breakeven point at which the investment yield neither gains nor losses. To find this investment rate you would have to enter a series of cash flows and the guess rate ( a default guess rate of 10% is employed when finding the IRR). The reason you would require this guess is due to the lack of a IRR formula to find internal rate of return. This leads to hiring some complicated numerical methods that perform iterative calculations starting with a guess rate of 10%. When such repeated calculation converge then we have found one of the IRR values but it is not for certain that such as a value will be found. In such cases you would have to enter a different value for the guess rate so to enable the IRR calculator to redo such iterative calcualtions. The online IRR calculator will accept a series of cash flows and the guess rate of 10% and process such information using the IRR formula and return a detailed workout that was performed internally to calculate the IRR.
Data input
%
Data ouput
f'(r) = 50(1+r)^2 80(1+r)^3 90(1+r)^4 40(1+r)^5
r0 = 0.1
f(r0) = 7.882
f'(r0) = 187.7356
r1 = 0.1  7.882/187.7356 = 0.1419844551017
Error Bound = 0.1419844551017  0.1 = 0.041984 > 0.000001
r1 = 0.1419844551017
f(r1) = 0.4788
f'(r1) = 165.5692
r2 = 0.1419844551017  0.4788/165.5692 = 0.14487617020274
Error Bound = 0.14487617020274  0.1419844551017 = 0.002892 > 0.000001
r2 = 0.14487617020274
f(r2) = 0.002
f'(r2) = 164.1783
r3 = 0.14487617020274  0.002/164.1783 = 0.14488844256652
Error Bound = 0.14488844256652  0.14487617020274 = 1.2E5 > 0.000001
r3 = 0.14488844256652
f(r3) = 0
f'(r3) = 164.1725
r4 = 0.14488844256652  0/164.1725 = 0.14488844278586
Error Bound = 0.14488844278586  0.14488844256652 = 0 < 0.000001
IRR = r4 = 0.14488844278586 or 14.49%