What is the correct way to calculate the IRR if there are multiple cash outflows (at different times) which all happened before any inflows?
For example, the cashflows may look like this: -600, -150, 0, -150, 0, 0, 18000
Is it as simple as solving r for 0 = -600 -150/(1+r) - 150/(1+r)^3 + 18000/(1+r)^6 ?
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A bit of an odd cash flow profile but if you have dates you can use the XIRR function and will tell you what the IRR is.
If your initial cash outlay is 600 and you exit at 18,000 - I'd like to invest ;)
Thanks. The additional outflows after the first one could be interpreted as follow-on investments. Mechanistically speaking, ignoring the dates (by assuming equal period between cashflows) is it the right approach?
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