How do I calculate IRR using monthly cash flows, not annual?
As I understand it, Excel assumes that for purposes of calculating IRR, each
consecutive value is an annual value. If I have a short lived project, say 16 months, Excel assumes that the cash flow in the 16th cell is the 16th year, thus the IRR is dramatically understated. How do you adjust for this effect in Excel? |
How do I calculate IRR using monthly cash flows, not annual?
Try looking at the XIRR function which measures the IRR between two specific
dates, eg btween 28/02/01 to 05/06/05. You may have to got to Tools - Add ins - Analysis toolpack. Paul "Mike Knoxville" wrote: As I understand it, Excel assumes that for purposes of calculating IRR, each consecutive value is an annual value. If I have a short lived project, say 16 months, Excel assumes that the cash flow in the 16th cell is the 16th year, thus the IRR is dramatically understated. How do you adjust for this effect in Excel? |
How do I calculate IRR using monthly cash flows, not annual?
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