IRR uses iteration to find the result.
Using your initial guess, or 10% if you don't supply one, IRR calculates the
present value of each cash flow. It then sums all the present values. If the
sum is greater than zero, it calculates a new guess less than 10%. If it's
less than zero, it increases the guess. It continues doing this until the
sum of the present values is zero (or close enough as defined by your
options).
Regards,
Fred
