I am told there are no IRR formulas when number of cash flows excess 5
Is it so?
Is there an IRR formula to find internal rate of return when number of cash flows exceed 5?
For example, is it possible to find IRR of the following investment using a "formula" rather than "iterative methods"
-100, 50, 40, 30, 10, 5
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Hi, Are you talking about formula in Excel or a calculator?
I am asking about a mathematical formula
for two set cash flows
i = (fv/pv)^(1/n)
for three set cash flows with the highest polynomial order of 2
i = [-b +/- Sqrt( b^2 - 4ac) ] / 2a
for four set cash flows with the highest polynomial order of 3
cubic formula
for five set cash flows with the highest polynomial order of 4
quartic formula
for number of cash flows > 5
Any formula?
Sorry, beats me. I was taught that it is practically impossible to do it by hand (for longer periods of time) without using trial and error. Hope someone can help you with this. Cheers.
I know what you mean
Someone I know says he has the formula to find IRR for any number of uneven cash flows
But if past is any indicator, then disclosing such formula in public would allow others to claim his hard work
Just as it has been for all of his previous financial formulas that have been stolen by companies such as Microsoft
My friend said to me that the word "impossible" is not there in his dictionary
To my question about his IRR formula, he replied
"For every annuity there is an equivalent perpetuity payment that has the same present value as that of the annuity"
http://math.stackexchange.com/questions/200617/how-to-solve-an-nth-degr…
Check this out. Short answer: no.
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