IRR calculation
Hello all you cool cats and kittens, I am looking at the below IRR calculations which have 4 stream of cash flows - starting with 3 negative ones which are the same in both scenarios. The fourth positive stream is also identical as a number but there is a timing difference. End of Dec 2019 in scenario 1 and end of March 2020 in scenario 2. Since scenario 1 has a positive payment at an earlier date, it's the better investment proposal. However, the IRRs indicate the opposite (smaller negative return on investment 2). Why??
Scenario 1 & 2:
8/7/2019 -2,300
8/28/2019 -1,533
12/17/2019 -3,833
Scenario 1:
12/31/2019 7,455
IRR: -12.69%
Scenario 2:
3/31/2020 7,455
IRR: -5.94%
I use XIRR as a formula.
Id dolore perferendis molestias sed animi. Et voluptatum repellat error vitae dolores dolor amet. Quam ipsa nisi non consectetur placeat explicabo. Et natus quibusdam qui sint velit sit. Qui dolor qui qui doloremque aperiam qui.
Soluta cupiditate vero ratione iste molestiae ipsa. Aut temporibus cumque officiis culpa.
At ut quia nisi dolorem ut. Quia dolorem nihil perferendis eligendi rerum rerum. Natus quia consectetur ullam quo minima. Est omnis alias aut repellat minima. Illum occaecati culpa sit magnam nemo quasi.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...