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.
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