IRR

[Michelle]

When using the IRR function, I am getting a "#NUM" error.
The cash flows are for 12 periods and switch between
positive and negative a few times. But I think the
problem is with the cash flow in the first period: it is
significantly larger than the cashflows in the other
periods. Somebody please help!!

Thank you.

 

[Bill]

There are a number of reasons why you may be getting the
error message.

First check this.
The initial outflow must be negative in order for the
function to work. The fact that cash flows switch sign
after that is ok.

 

[Guest]

I've ran into this problem too. Especially when using a
monthly CF schedule. If I recall correctly it has to do
with your "guess" as to the IRR in the formula. Because
it is monthly you need to divide your guess by 12 and then
multiply the formula result by 12. It has something to do
with exceeding your calculation iterations.

Also, I suggest you use the XIRR function and associate a
date for each month in the CF. It is a more accurate
result then /12 and then * the result by 12.