how is irr calculated?
Determine the internal rate of return using cash flows that occur at regular intervals, such as monthly or annually. Each cash flow, specified as a value, occurs at the end of a period. IRR is calculated through an iterative search procedure that starts with an estimate for IRR â specified as a guess â and then repeatedly varies that value until a correct IRR is reached. Specifying a guess argument is optional; Excel uses 10% as the default value.