IRR Function

IRR Function

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Class

Microsoft.VisualBasic.Financial

Syntax

     Dim result As Double = IRR(valueArray(  )[, guess]) 

valueArray( ) (required; array of Double)

An array of cash flow values.

guess (optional; Double)

Estimated value to be returned by the function. If omitted, a value of 0.1 is used.

Description

The IRR function calculates the internal rate of return for a series of periodic cash flows (payments and receipts). The internal rate of return is the interest rate generated by an investment consisting of payments and receipts that occur at regular intervals. It is generally compared to a "hurdle rate," or a minimum return, to determine whether a particular investment should be made.

Usage at a Glance

• valueArray must be a one-dimensional array that contains at least one negative value (a payment) and at least one positive value (a receipt).

• Individual members of valueArray are interpreted sequentially, from first to last.

• IRR begins with guess and uses iteration to obtain an internal rate of return that is accurate to within 0.00001 percent. If this cannot be done within 20 iterations, the function fails. If it fails, try a different value for guess.

• Each element of valueArray represents a payment or a receipt that occurs at a regular time interval. If this is not the case, IRR will return erroneous results.

See Also

MIRR Function