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#1
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xirr
The result of below XIRR calculation is very weired.
Apr 5, 06 16328 Oct 2, 06 16096 Jul 3 07 11251 Nov 1 07 71414 Dec 3 07 79637 Jan 2 08 13845 Feb 1 08 12610 Sep 17 08 -175691 Xirr answer: 2.98E-09 But if I change Sep 17 08 cash flow to -189000, XIRR come correct answer -14.3%. Any clue. Thanks. Janven |
#2
Posted to microsoft.public.excel.worksheet.functions
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xirr
Well, taking its output literally it seems to be claiming that the rate of
return for this flow is very nearly nothing, that is, even. That doesn't look right to me, but I get the same result. Here's one thing I notice: When, with the below numbers, I enter a guess of some negative percentage like -0.1, it comes up with -20.43%, which is probably correct. Maybe for some ranges its iterative calculation gets it going in the wrong direction and it craps out with misleading results. Tell it to start guessing with a negative result rather than its default +0.1 and it seems to do better. --- "Janven" wrote: The result of below XIRR calculation is very weired. Apr 5, 06 16328 Oct 2, 06 16096 Jul 3 07 11251 Nov 1 07 71414 Dec 3 07 79637 Jan 2 08 13845 Feb 1 08 12610 Sep 17 08 -175691 Xirr answer: 2.98E-09 But if I change Sep 17 08 cash flow to -189000, XIRR come correct answer -14.3%. |
#3
Posted to microsoft.public.excel.worksheet.functions
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xirr
On Fri, 19 Sep 2008 14:05:01 -0700, Janven
wrote: The result of below XIRR calculation is very weired. Apr 5, 06 16328 Oct 2, 06 16096 Jul 3 07 11251 Nov 1 07 71414 Dec 3 07 79637 Jan 2 08 13845 Feb 1 08 12610 Sep 17 08 -175691 Xirr answer: 2.98E-09 But if I change Sep 17 08 cash flow to -189000, XIRR come correct answer -14.3%. Any clue. Thanks. Janven If you check HELP for XIRR, you will discover that you need to supply an appropriate guess. If you do not, then XIRR assumes a guess of 10%. Since you have an absolute loss of about 45000 with an investment of about 220000, I'd say an appropriate guess might be about -20%. Entering that value as a guess gives an appropriate result of -20.43%. There is no documentation that I've seen from MS as to when a guess of other than the assumed 10% will be required. --ron |
#4
Posted to microsoft.public.excel.worksheet.functions
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xirr
One way to improve XIRR's results is to always use a Guess with the same
sign as the results. If you've made money, guess 10%; if you've lost money, guess -10%. You can generalize this as follows: =Xirr(Values, Dates, Sign(Sum(Values))*10%) Regards, Fred. "Janven" wrote in message ... The result of below XIRR calculation is very weired. Apr 5, 06 16328 Oct 2, 06 16096 Jul 3 07 11251 Nov 1 07 71414 Dec 3 07 79637 Jan 2 08 13845 Feb 1 08 12610 Sep 17 08 -175691 Xirr answer: 2.98E-09 But if I change Sep 17 08 cash flow to -189000, XIRR come correct answer -14.3%. Any clue. Thanks. Janven |
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