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joeu2004[_2_] joeu2004[_2_] is offline
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Default IRR function in Excel 2010 returns #NUM! error for an investment with all negative cash flows

"Ron Rosenfeld" wrote:
So you invested $1,000; and then you made further investments
of $644.89; $338.33 and $87.34. Or a total investment of a
bit more than $2070. It would seem your loss is 100%.


Ron, you are wasting your time. The OP is a troll. His primary purpose in
posing such questions is to ultimately demonstrate the "superiority" of his
tadXL add-in functions. I just ignore him. [1]

Anyone with a modicum of math knowledge can look at the NPV formula and see
that if all the cash flows have the same sign, their sum cannot be zero for
valid IRRs greater than -1% (i.e. more positive).

The OP allows for IRRs less than -1%. As I have explained to him many
times, they are invalid IRRs because they flip the sign of the cash flows
for odd-numbered cash-flow periods.

Only then can the sum of the cash flows sum to zero. But in practical
terms, it is incorrect to flip the sign of some discounted cash flows. An
undiscounted inflow cannot turn into a discounted outflow, and vice versa.

But the OP constinues to insist that less-than-negative-1% is valid because
it can be derived algebraically.


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[1] FYI, the OP goes by the names Abraham A (on the tadXL website) and
"Financial Engineer" (in the MS Answers Communuity, for example). The
latter is a misrepresentation. He does not have an FE degree of any sort,
and he does not work as a professional FE, according to self-described
information on the now-defunct tadXL website, IIRC.

Not that an FE degree or FE experience is required to speak intelligently
about these financial concepts. I'm just saying that he is not a "Financial
Engineer" in any professional sense.