XIRR vs. Hence, we will calculate the XIRR on an excel as follows: XIRR Value calculation on excel = XIRR (select range of all the values of investment from 1st to last withdrawal), (select all the time periods) x 100. Excel also offers two other functions that can be used in IRR calculations, the XIRR and the MIRR. As the name implies, MIRR is a modification of the internal rate of return (IRR) and as such aims to resolve some problems with the IRR. The modified internal rate of return is a financial calculator. . Find the internal rate of return for an investment of $10,000 that returns the following nonperiodic cash flow. The first payment is optional and corresponds to a cost or payment that occurs at the beginning of the investment. In this case, XIRR = 15. What Is XIRR? XIRR stands for Extended Internal Rate of Return and is very similar to regular IRR, but there are a few key differences. The 3 functions offered by Excel are IRR, MIRR and XIRR. REITs are shares offered to. If we use MIRR and reinvest dividends at (still pretty high) 10% p. xirr assumes uneven cashflows and basically computes the exact discount factor for each cashflow based on daily discounting using a 365 day calendar. For example, you invest Rs 3,000 per month in a mutual fund. It is a Microsoft Excel function which helps to calculate annualised returns on investment which involves irregular transactions. Data Tables & Scenario modeling is one of the 50 ways to analyze data in Excel. Here is a quick CAGR vs XIRR comparison table that highlights the differences: CAGR. IRR is based on the principle that interim cash flows are reinvested at the project’s IRR. 5% respectively) - as the PIRR depends on knowing all the cash flows (and their timings) from both investments. This XIRR value can be used to compare the return from different investment instruments. However, while IRR assumes that the cash. Here, taking the same example we can see Investment is made at irregular intervals. MIRR vs. Obviously, one discount rate may generate lower NPV than the. Select the cell “D17” where the MIRR function needs to be applied; click the insert function button (fx) under the formula toolbar, and a dialog box will appear, type the keyword “MIRR” in the search for a function box, MIRR function will appear in select a function box. The primary difference between CAGR and XIRR lies in their consideration of cash flows. So, XIRR and IRR will give the same output if the intervals between cash flows are regular. D7=((1+D6)^D2)-1CAGR and IRR help you compute the returns on lump sum and regular multi-cash-flow investments, respectively. The 2020 GIPS® standards allows firms to use any money-weighted method; this is a change from prior versions, where only the IRR can be used. Calculating XIRR in Excel. 3. The Internal Rate of Return is the discount rate which sets the Net Present Value (NPV) of all future cash flow of an investment to zero. The biggest difference between the two formulas is that IRR considers the time value of money (TVM) while ROI doesn’t. 92% originally calculated, and this is the MIRR for this project. IRR is based on the principle that interim cash flows are reinvested at the project’s IRR. Basis. The IRR function uses one required argument and one optional: The values: they represent the series of cash flows, including net income value and investments. 3 min read. Like IRR, XIRR lets the Excel user optionally insert a guess into the Function Arguments screen box. In this video, I explain the difference between IRR & MIRR and walk through several examples applying the two concepts. The natural extension of its use was for calculating CAGR in any. If the decision is made by choosing the project with the higher IRR rather than the one with. XIRR vs. e. The purpose of the XIRR function was to simplify calculations where the cash flows were irregular. Steps for using Excel’s XIRR function: Click the f x function in Excel. collapse all. Unlike, under MIRR, cash flows apart from initial cash flows are reinvested at firm’s rate of return. Using the example data shown above, the IRR formula would be =IRR (D2:D14,. i use this function the least. 8%. Values must contain at least one positive value and one negative value to calculate the internal rate of return. . Unlike CAGR, the IRR calculation relies on cash inflows and. =IRR (values, [guess]) Values: an array or a reference to cells that contain numbers for which you want to calculate the internal rate of return. Sections below explain what a discount rate that leads to a 0 NPV says about investment returns and costs. The difference is due to several factors. The internal rate of return (IRR) for a cash flow stream is the interest rate (discount rate) that produces a net present value of 0 for the stream. in 14 mins. This is an guide to NPV contrast IRRE. Obviously, one discount rate may generate lower NPV than the other. Returns must be calculated for. You use this function to find the internal rate of return for periodic cash flows such as monthly, quarterly or annual. In our example, that comes out to be 10%. See example above. In other words, the internal rate of return is the interest rate that an initial investment must have grown by each year in order to reach the provided value at. (MIRR) - The MIRR adjusts for the timing of cash flows, so that it more accurately reflects the actual rate of return on an investment. Mutual fund companies use internal rates of return to estimate the performance of a mutual fund over a given period. We. XIRR return is a valuable tool for. The Internal Rate of Return (IRR) calculated using the XIRR function in Excel and CAGR are very different calculation formulas suitable for different types of growth and investment patterns. I sure could use some help in figuring out what's is going wrong. But. IRR is. Unlike, under MIRR, cash flows apart from initial cash flows are reinvested at firm’s rate of return. Using the Extended Internal Rate of Return calculation tool is a bit more complicated than a typical IRR calculator: Enter the initial investment (it can be in any currency like US dollars, EUR, Swiss francs, etc. The IRR function calculates the internal rate of return for a series of cash flows, the MIRR function works with interest rates for borrowing and investing, and the XIRR function calculates a more. Syntax. IRR is a financial metric used to calculate the rate of return at which the net present value (NPV) of an investment becomes zero. An IRR higher than the discount rate signifies a profitable investment opportunity. When to use IRR vs. XIRR vs. All your outflows including investments, purchases shall be market negative and all your inflows i. 2. The modified internal rate of return (MIRR) and the internal rate of return (IRR) are two closely-related concepts. A simple example will help explain matters. 7%. Unlike the CoC return, however, IRR accounts for the time that an investor’s funds are tied up in a project. YIELD seems to take coupon payment frequency into account, even with a zero coupon bond. However, there are different types of IRR. The IRR and XIRR calculations are total return profitability metrics that account for the time value of money, unlike other total return metrics like equity multiple and annualized rate of return (ARR). If the IRR is larger than the hurdle rate, it is usually considered a good outcome. 5%. MOIC is generally quoted on a gross basis, while IRR is quoted on a gross or net basis. a. The IRR provides a rate of return on an annual basis while the ROI gives an evaluator the comprehensive return on a project over the project’s entire life. $egingroup$ Excel's IRR() function requires periodic cashflows - the abstract concept of IRR does not! Indeed, one can use Excel's XIRR function when cashflows are at irregular intervals. For example, a bond that makes annual payments exactly on the 1st of January each year uses periodic payments. a bigger numerator must be divided by a bigger denominator, and hence IRR, given the. Here we discuss internal rate of return & extended IRR, key differences, comparison, examples & downloadable template. NPV’s presumption is that intermediate cash flow is reinvested at cutoff rate, while under the IRR approach, an intermediate cash flow is invested at the prevailing internal rate of return. IRR este versiunea de bază a calculului rentabilității investiției pentru o investiție pentru o serie de fluxuri de numerar. In fact, if we reviewed on Nov 2019, your absolute cash you get back was lower ($3. IRR is the discounted rate of all future expected cash flows of an investment or project. Both give an overview of the profitability of an investment. 93/90000)^ (1/6)}-1 = 3. So there's quite a bit of difference between these. 96% for five years, amounting to Rs. For Excel XIRR, the mathematical equation is (from the Excel XNPV support page): P[j] should be called CF[j]; it is each cash flow. Internal rate of return (IRR) is a discount rate. Example: IRR vs NPV in Capital Budgeting . CAGR represents the smooth average annual growth rate of an investment, assuming that it has grown at a steady rate over the specified period. This function is more suitable for. 8 at year 0 and 78. Investments are displayed as negative numbers, while. So, CAGR shows that your investment of Rs. XIRR is the annual effective yield - XIRR uses Actual/365 day count convention XIRR is itself not a rate of return, it is simply an effective yield The rate of return may be found by using NOMINAL function around XIRR function. 000001%. modified internal rate of return. If your cash flows occur at regular intervals, the IRR function is the appropriate choice. 이 기사에서는 IRR과 MIRR 간의 모든 중요한 차이점을 자세히 설명합니다. MIRR. 2017/7/20 EXCEL財務函數IRR、XIRR、MIRR. This is particularly true of a calculation on which you might base an investment decision. d[j] is the date corresponding the CF[j] cash flow. The top-ranked project based on IRR dropped to the tenth-most-attractive project. If you want to validate the IRR, calculate the NPV of the future cash flows using the IRR as the discount rate, and you should get the amount of the "initial" investment. However, if your cash flows are irregular, the XIRR function will provide a more accurate measure of return. Step 2: Apply the IRR formula. Notice that the IRR is now 13. 111. Return : {108150. The internal rate of return is the amount above the break-even point that an investment may earn. CAGR. Return on equity, abbreviated as ROE, and internal rate of return, or IRR, are both figures that describe returns that can impact a shareholder's investment. It is a variant of the Internal Rate of Return (IRR) formula used to calculate the return on investment of a mutual fund. IRR is used to measure the estimated cash flows of investments against a benchmark. IRRs are generally higher early in an investment’s life; MOIC is generally higher later in an investment’s life. IRR accounts for the timing and magnitude of fund cash flows. IRR vs. In general, MIRR is considered better than IRR. = 100 * 20000/12000. However, there are times when it isn’t. MIRR Formula. By using this approach, the MIRR boils a set of cash flows down to just two numbers: 1) a single initial investment amount at the present time and 2) a total accumulated capital amount at the end of the holding period. Return = xirr(___,Guess,MaxIterations,Basis) adds optional arguments. . When there is no Net Present Value (NPV), the interest rate is calculated using the IRR. IRR vs. Research on the modified internal rate of return. IRR. How to calculate IRR in Excel with formulas. So. Method 2 – spreadsheet package In Excel and other spreadsheet software you will find an MIRR function of the form: =MIRR(value_range,finance_rate,reinvestment_rate) where the finance rate is the firm’s cost of capital and. 7 lakh, the CAGR would be calculated as follows: CAGR = [ (7,00,000/5,00,000)^⅕] – 1 = 6. i probably use this the most. After all, $1 today is worth more than $1 ten years from now. To calculate XIRR in Excel, you need to follow these steps: Enter your cash flows and their corresponding dates in two separate columns. For instance (as represented by the table above), if a property was purchased for $110,000 and generated $10,000 a year of income over the next 3 years, after being sold for $120,000 at the end of. Modified Internal Rate Of Return - MIRR: Modified internal rate of return (MIRR) assumes that positive cash flows are reinvested at the firm's cost of capital, and the initial outlays are financed. The MIRR function also considers the interest from the reinvestment of money. Upgrade to Microsoft Edge to take advantage of the latest features, security updates, and technical support. It’s always dangerous to treat an Excel function like magic. By contrast, the XIRR formula considers the dates when the cash flow actually happens. In the following dataset, you can see that the cash flow is month based instead of year based. However, when I apply it to a list of about 120 cash flows (several positive and several negative), I get a. It considers the timing and magnitude of cash flows. To learn more about XIRR vs IRR we have created a similar guide, which we highly recommend you check out to further solidify the concept. In contrast, the IRR does not take the cost of the. At its core, IRR measures annual growth rate, which. You then apply the XIRR formula to calculate SIP returns. MIRR, but are not yet equipped to deal adequately with the cash flows involved. XIRR considers the timing of cash flows when measuring the performance of an investment. Solved by E. How to apply XIRR, IRR & MIRR (IRR vs XIRR vs MIRR) in excel. MIRR Function = MIRR (values, finance_rate, reinvest_rate) values: The array or range of cells with the value of the cash flows, including the initial outflow. ROI Calculation = (300,000/100,000-1) x100= 200%. IRR vs. AEY = ( 1 + nonimal_rate/m )^m - 1. Generally, a deal with higher IRR is better; however, some investors may prefer lower IRR if the deal provides lesser risk and healthier cash flow over a longer period. Interpreting the results, the answer means the user with stated investments and returns will get an IRR of approximately 9%. Guess: [optional]; a number that you guess is close to the result of IRR; 0. XIRR este versiunea îmbunătățită a IRR în care XIRR ia în considerare seria programată de fluxuri de numerar. Formula Annual TWR Formula Given Four Quarterly Returns: [(1+R 1)(1+R 2)(1+R 3)(1+R 4)] – 1IRR, a long-standing industry standard, signifies the discount rate at which an investment's net present value (NPV) reaches zero. Surprisingly, even a better decision to. Time Period (months) Internal Rate of Return (IRR) 6. All NPV, IRR, MIRR, XIRR, and XMIRR are used to analyze investments and to choose between 2 investments. Excel's IRR function. Type the formula =XIRR (values_range, dates_range), where ‘values_range’ is the range of cells containing your cash. Here is a quick CAGR vs XIRR comparison table that highlights the differences: CAGR. dates – a range of dates corresponding to values. Not surprisingly, interpreting IRR results in a way that makes practical sense for. In the above example the CAGR returns is 10. IRR (values, [guess]) The IRR function syntax has the following arguments: Values Required. 96%. Using the XIRR function to compute the IRR for both projects demonstrates that the expansion project would produce an internal rate of return of 14. In the function search box, type in XIRR for this type of IRR function (or select XIRR if given a choice of which IRR function to use). Because of this, XIRR is a more accurate way to evaluate an investment. XNPV: Calculates the net present value of an investment based on a specified series of potentially irregularly spaced cash flows and a discount rate. i use this function the least. Does calculating an IRR monthly vs yearly make a difference? What about the question of whether to use the beginning or end of period? This article and video use the XIRR (and XNPV) process introduced by Microsoft Excel in 1997 to show why monthly calculation is important, and using the XIRR (and XNPV) means the question of beginning or end of. 26 or $6. Unlike traditional IRR, mIRR uses a constant. 2. Thus if your quarterly cash flows return an XIRR of 5% then this is the APR (AEY). The investment must have a negative sign, as it is a cost. Furthermore, in examples where the PV of return phase net cash flows has already been calculated, there is yet another formula for computing MIRR (which is given on the ACCA formulae sheet). MIRR is a modified version of IRR that addresses some limitations of IRR by assuming reinvestment of positive cash flows at a predetermined rate and. Differences Between The Two Formulas. Select an empty cell where you want the XIRR result to appear. It assumes that the positive cash flows from a project are reinvested on the same rate of return as that of investments. XIRR vs IRR. Step 3: Compare the IRR with the Discount Rate. This means that it is more accurate than the internal rate of return when comparing investments with different holding periods. Concept clarity of IRR MIRR and XIRR and How to calculateEnter the formula =IRR and choose the range of cells. Also outputs the gross return and the net cash. XIRR should be the go-to metric rather than IRR. 9 465146064758%. Net Cash Flow, MIRR, NPV, ROI, and Payback. interest rate) to fund the project or investment. 2. You see this most often on car loans. dates - A range of cells containing the corresponding dates for each. At the same time, both methods offer. To calculate IRR using XIRR, you first need to know the cash flows of your investment. XIRR. The MIRR was introduced to address a few problems associated with the IRR. a. It is calculated by the Internal Rate of Return (IRR) for a collection of money. Created a package for fast XIRR calculation, PyXIRR. All intermediate values are kept as zeros. The modified internal rate of return (MIRR) formula in Excel is as follows. In the second case, you earn a constant 12 percent p. IRR vs XIRR Comparație Head to Head. The net present value of monthly loan repayments at the IRR is the same as the Loan amount. 1. , value of MIRR will be 12%. In theory, XIRR and YIELDMAT should be pretty close, save for the 365 v 360 day convention. We missed out on a lot of the. Unfortunately, these investment decisions. where r is the discount rate or IRR, and n is the number of time. IRR is usually expressed as a percentage and sometimes compared to a hurdle rate (a desired rate of growth set by the company). equity cash flows out (£9. If the first value is a cost or payment, it must be a negative value. The XIRR function calculates the internal rate of return for a series of cash flows that occur at irregular intervals. e. Compound Approach: Using an Excel function is not necessary if the aggregated cash flows have been computed. We can helpIvan Kitov. Internal rate of return (IRR) and modified internal rate of return (MIRR) are Excel functions you can use to determine the rate of return on your investment. IRR is what a lender would actually make on a loan, and is often applied as a standard, annualized way to compare investment returns. The purpose of calculation of NPV is to determine the surplus from the project, whereas IRR represents the state of no profit no loss. vs. In this video, I explain the difference between IRR & MIRR and walk through several examples applying the two concepts. demisaint said: My question is that when I run xirr on monthly cashflow compared against when I group 12month cashflow to become a yearly cashflow, the xirr differ by 0. IRR for private equity performance, investors can consider both measures in their evaluation process. So, when it comes to XIRR vs. For the same reasons as noted above in this guide, it’s equally important to use specific dates when calculating the internal rate of return on an investment. In this video, we dive into the IRR and XIRR functions in Excel. If you have an investment today of 100, are getting 12 each year, and. , value of MIRR will be 12%. Modified Internal Rate of Return (MIRR) The internal rate of return (IRR) is a break-even cost of capital - i. XIRR – finds IRR for a series of cash flows that occur at irregular intervals. XIRR (values, dates, [guess]) The XIRR function syntax has the following arguments: Values Required. 4%), because of the high early exit (+40) in year 3 of transaction 1. If omitted, Excel takes the default value of 10%. XIRR vs CAGR. Where: CF = cash inflow. To simplify things, the primary difference between IRR and XIRR is that XIRR considers external factors while the IRR function does not. C = Cash Flow at time t. “Values” represents both the negative cash flow and positive cash flow for the investment period. 5%, while the new machine purchase would. XIRR is an Internal Rate of Return (IRR) for mutual funds. 01% and a weighted ROIC of 47. mirr is like xirr except u can specify a. IRR vs MIRR IRR vs XIRR IRR assumes that all cash flows generated by an investment will be reinvested at the same rate as the IRR. What is XIRR vs IRR in Excel? In financial modeling and valuation, it’s critical to understand why to use XIRR vs IRR. This results in a 10% IRR, and a gross profit of 1,100,000 – 1,000,000, or 100,000. $endgroup$ –The higher IRR of an undertaken project indicates more worth pursuing and expected to give good return in future. Subsequent payments are discounted based on a 365-day year. This is a repeat of the screenshot above with an IRR of 41. Next, press Enter. IRR vs. IRR results in the above examples required only the net cash flow figures for each period (year). Using a changing rate (starting with [guess]), XIRR cycles through the calculation until the result is accurate within 0. I need some help with the XMIRR function. IRR vs. XIRR is especially useful for calculating returns on Mutual Fund SIP investments. 2. 1%, but powerbi throws an error, Calculation error: cannot find a solution; with formula. Calculate IRR of non-periodic cash flow payments a. There are three Excel functions related to calculating IRR. MIRR can be used to rank investments or projects of. In our example, that comes out to be 10%. Equally meaningless would be establishing an internal target for project. IRR is sometimes also called as ERR or economic rate of return. loan over 10 yrs. When investments have cash flows that move up and down at various times in the year, the IRR models can. To learn more about the XIRR formula, click here. Calculation of IRR (Internal rate of return) in case of consistent cash flows. Typically, the higher the IRR, the more profitable an investment will be. It considers the timing and magnitude of cash flows. Why is this? In our guide to the difference between IRR and XIRR, we’ll take you through the ins and outs of the IRR and XIRR formulas, providing you with a comprehensive. When looking to compare similar projects tools such as IRR and MIRR are used. Step 1: Populate the Cash Flows. It further means that the investment would generate a return of around 9% profit. Now, you need to add the corresponding transaction date in the next column. ปกติแล้ว Concept ของ NPV ก็คือการเปลี่ยน Cashflow ตลอดทั้งโครงการให้ไปอยู่ที่จุดเดียวกันคือเริ่มต้น (ใช้ PV กับทุก Cashflow. The main difference in IRR vs XIRR is that IRR deals with cash flows at regular intervals, while the XIRR deals with irregular cash flows. = 166. IRR is used for private fund managers because they typically exercise a degree of control over the amount and timing of fund cash flows. 2. It pays attention to the length of payment periods, so you must also enter specific dates. See Also. In an LBO model, you would typically use the IRR function to. It assumes that positive cash flows are reinvested based on the cost of the capital of the firm. If omitted, Excel takes the default value of 10%. Here we calculate the discount rate or the IRR at which the Net Present Value of the investment becomes zero. Essentially, it reveals the rate at which an investment appreciates or depreciates over time. This XIRR vs IRR template allows you to differentiate between the use of IRR and XIRR functions to compute the internal rate of return. MRR, IRR, and NPV as project tranking measures. XIRR is the abbreviation for Extended Internal Rate of Return. IRR Calculator. It uses the investor’s estimated rate of return on this reinvested cash. a. The same is probably true of the YIELD and XIRR. b. Since the guess argument is optional, let us leave it. XIRR and CAGR represent returns from your mutual fund investments, but their applications differ. The Internal Rate of Return (“IRR”) is the rate (“r”) at which the Net Present Value (“NPV”) of all future cash inflows and outflows (“CF”) for a project is zero. This paper evaluates. NPV The NPV function determines the net present value of cash flows using a specific discount rate, which is often the IRR. Internal rate of return (IRR) and modified internal rate of return (MIRR) are Excel functions you can use to determine the rate of return on your investment. MIRR Formula. Figure 3. If I change certain cashflows values I can get the values to align. พื้นฐานของ NPV และ IRR. Additionally, XIRR provides better. What is the IRR approach? The IRR approach is a guideline for evaluating whether to proceed with a project or investment. If we want to calculate for irregular intervals, then we need the XIRR function. Suitable for lumpsum investments. Apart from the IRR metric, you can also determine the profitability of an investment with MIRR – the modified internal rate of return. 2021 4087-4090. The disadvantages of the IRR is partially addressed with the Modify IRR. I understand XIRR handles irregular cash flows while IRR assumes periodic cash flows, but why would XIRR return 10. Choosing between IRR and XIRR depends largely on the nature of your cash flows. However, in IRR, we do not enter the dates for calculation. While CAGR is easier to calculate, IRR can cope with more complicated situations. Choose a column or cell for displaying your XIRR result and fill in the required detail. The IRR function. Internal rate of return (IRR) and net present value (NPV) aren’t always equally effective. The IRR function assumes that all the periods in a series of cash flows are equal. Difference Between IRR and XIRR. One interpretation of this rule is to see the IRR as a project "return. IRR assumes that all cash flows generated by an investment will be reinvested at the same rate as the IRR. Calculation of XIRR (Extended Internal rate of return) in case of inconsistent cash flows. 8, so that would appear to to explain the difference. Again, the XIRR function incorporates both the dates and the amount of the cash flows. In the case of SIP, since there are multiple investments (therefore multiple purchase prices) and different time periods for each installment, calculating returns is a bit. An array or a reference to cells that contain numbers for which you want to calculate the internal rate of return. The IRR formula only requires you to select the series of cash flows to calculate the IRR. A CAGR return assumes all investments have been made at the beginning of the year, while XIRR considers periodic instalments as separate investments. top of page. MIRR (values, finance_rate, reinvest_rate) The inputs in the MIRR formula are as follows: The array or range of cells with the value of the cash flows, including the initial outflow. As its name suggests, the MIRR is a modification of the internal rate of return (IRR) formula and aims to be a more reliable version of that measure. Together, MOIC & IRR can help paint a better picture when evaluating PE performance. MIRR: Calculates the modified internal rate of return on an investment based on a series of periodic cash flows and the difference between the interest rate paid on financing versus the return received on reinvested income. Resultantly, XIRR provides an accurate picture of the mutual fund’s performance. , = IRR ($ C $ 6: $ F $ 6, C12)), there are two IRRs. If the second parameter is not used in the function, Excel will find an IRR of -10%. 63 x 7/3 = 3. IRR. The value of MIRR more precisely. Some of the key formulas and functions used for IRR calculation in Excel include: XIRR The XIRR function is used to calculate the internal rate of return for cash flows that occur at irregular intervals. By comparison, the IRR doesn't factor in the cost of investment in calculating a. While the CAGR gives the average return rate for a specific period, XIRR considers the cash inflows and outflows to provide an accurate annual return rate. You can choose to enter yearly cash flows or simply calculate based upon a multiple. Modus Operandi. In this blog post will discuss XIRR vs IRR, the differences between Extended Internal Rate of Return (XIRR), and Internal Rate of Return. Hi all I am reviewing a spreadsheet and trying to compare results between IRR and XIRR. The difference between the IRR calculation in Figure 2. As you already know, the IRR stands for internal rate of return. MIRR incorporates more information and more accurately reflects expected rates of return around cash outlays. Simply. IRR measures the total return on an investment, and it weighs early cash returns more heavily. Credit Cards — Interest charged on the late payment or non-payment of credit card due, is calculated using the compound interest. national rate of return is a rate of interest which matches present value of future pos flows with the initial capital outflow. If the returns are the same (like in an FD), the maturity value will be known the moment you create the FD. 22%. Now, we would simply apply the IRR function to calculate the CAGR, as shown below: The CAGR we get is: Let’s do reverse engineering to check if the resulting value is correct or not. =XIRR (Levered Cash Flow, Corresponding Dates) The internal rate of return (IRR) is determined using the “XIRR” function in Excel, which comprises two arrays: Cash Flow → The cash flow array is the net differential between the cash “inflows” and cash “outflows” in. The main difference between these two metrics lies in the approach to the cash inflows: in MIRR, we assume that each cash inflow is reinvested at a steady rate, called the reinvestment rate. Internal rate of return (IRR) tries to figure out how quickly (if at all), and at what rate, an investment will show a profit. Now, in another cell, put in the XIRR function. So, when it comes to XIRR vs. IRR, you should always use XIRR unless you explicitly want to calculate the IRR over a yearly period. If the first value is a cost or payment, it must be a. So for the 9/1, you would be invested for just 3 days, not 7 days as I suspect you used for calculating the IRR. Same may be found by rearranging the AEY formula given earlier.