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Algorithm for IRR

I am looking for a fast algorithm for calculating IRR (internal rate of
return).

Thanks,
--
Mark W. Baumann - <mailto:mbaum...@tamu.edu>

 

Re:Algorithm for IRR


"Mark W. Baumann" <mbaum...@tamu.edu> wrote:

Quote
>I am looking for a fast algorithm for calculating IRR (internal rate of
>return).

Why do you want IRR for projects?  NPV (net present value) is proven
to be a much better measure.....

But anyway, IRR is the discount rate at which the NPV of a project is
0.

Take it from there...

Re:Algorithm for IRR


In article <55qqb2$...@news.corpcomm.net>,

Quote
Glenn Grotzinger <ggr...@internetland.net> wrote:

(about a TP users question)
:Why do you want IRR for projects?  NPV (net present value) is proven
:to be a much better measure.....

I am pleased to see that you have read your capital investment
textbooks well. Under the strict theory of finance what you say is
certainly true. That holds in the cases of mutually exlusive
projects, under capital rationing, under non-conventional net cash
flow (more than one change of sign), project of different order of
size or under a few other circumstances. Otherwise the two methods
will agree. The operational advantage of IRR over ARR is
intuitiveness, since it is a relative measure of profitability easy
to compare e.g. with (the rate of) the cost capital while NPV is in
absolute terms. Capital and financial intestments, however, are not
the only (even if by far the most usual) targets for NPV / IRR
calculations. (See the latter, academic reference, with source
code).

:But anyway, IRR is the discount rate at which the NPV of a project is :0.
:Take it from there...

 303778 May 2 1991 ftp://garbo.uwasa.fi/pc/turbopas/nrpas13.zip
 nrpas13.zip Numerical Recipes Pascal shareware version, 303K!

 23492 Apr 21 1996 ftp://garbo.uwasa.fi/pc/research/simirr11.zip
 simirr11.zip Deriving IRR from ARR: A Simulation Testbench, TS+IV

   All the best, Timo

....................................................................
Prof. Timo Salmi   Co-moderator of news:comp.archives.msdos.announce
Moderating at ftp:// & http://garbo.uwasa.fi archives  193.166.120.5
Department of Accounting and Business Finance  ; University of Vaasa
mailto:t...@uwasa.fi  <URL:http://uwasa.fi/~ts>  ; FIN-65101,  Finland

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