Now that we have the data, calculating the result is easy. Your cash flow is as
follows:

01/01/06 -3,362,000
04/01/06 150,000
07/01/06 150,000
10/01/06 150,000
01/01/07 3,200,000

Put those numbers in a table. Feed them to XIRR, as in =xirr(b1:b5,a1:a5). It
will give you your answer (9.17%)

Alternatively, you can use IRR because your cash flows happen at regular
intervals. Remember, however, that the rate of return that IRR gives you is the
*periodic* return. As your payments are quarterly, IRR will calculate a
quarterly return. If you want an annual return, you will need to convert it.
When you compare the two, you'll find a difference in the third decimal because
your payments are not exactly the same number of days apart. That's why most
people like XIRR.

Have we solved your problem for you?

--
Regards,
Fred


"littleps" wrote in
message ...

Thank you for your replies.
Actually as per agreemnt the folowing info is known:
Cost of the asset is 3,512,000 at the beginning of the lease. Inception
of the lease is let's say 01.01.2006 for convenience. 4 payments are to
be made IN ADVANCE. It means that e.g. 01.01.2006 - 150,000; 01.04.2006
- 150,000; 01.07.2006 - 150,000; 01.10.2006 - 150,000. Then it says that
the assset will be purchased on annivesary @ 3,200,000. My understanding
is on Jan'07. The problem is correct calculation of internal rate of
return (IRR). Based on this percentage rate I'll be able to pick out
finance charge out of each pmnt.

Thanks.


--
littleps
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