Back into IRR in excel ?
Anyone know how to back into an IRR in excel?
it gives 4 values; 10,-50,-20,10 along with the current IRR. Afterwards it asks to get to a certain IRR (25%) in excel.. pretty stuck on this practice question so all help would be appreciated
have an input, purchase, then cash flows, then irr formula. use data tab in excel then goal seek. have the purchase price change to equal the 25% irr
Thank you for the response. It asks me to show a formula so I don’t think goal seek works for it. I have the correct answer already via the goalseek, just no clue how to back in
Set the first cash outflow (your purchase price) to the negative NPV of all cash flows thereafter where the discount rate is 25%.
It's a bit unclear to me what you are actually trying to calculate using what inputs. What are you supposed to change? (i.e. aquisition price? exit?). Are you trying to understand what would be the cash flows required at each point in time to get to those IRRs?
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