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05.31.2007 at 08:07PM PDT, ID: 22606280
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Calculating annualized ROI in excel with two out flows and irregular inflows

Tags: roi, excel, annualized
I have created a cash flow projection in excel.  The projections are  based on a staggered investment (two out flows) with the resulting future inflows being at irregular time intervals.  How do I calculate the annualized ROI iin excel?  For example, what would the formula be for the following set of cash flows:
Month 1 $(500,0000)
Months 2 - 5 $0
Month 6 $(500,000)
Months 7 - 32 $0
Month 33 $260,000
Months 34 - 35 $0
Month 36 $200,000
Month 37 $0
Month 38 $350,000
Month 39 $0
Month 40 $25,000
Months 41 - 43 $0
Month 44 $25,000
Month 45 $0
Month 46 $50,000
Months 46 - 47 $0
Month 48 $117,014

Thanks,
Peter
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Question Stats
Zone: Software
Question Asked By: peterkehle
Solution Provided By: scottr_gp
Participating Experts: 1
Solution Grade: A
Views: 98
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06.01.2007 at 04:11AM PDT, ID: 19194157

Rank: Master

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06.01.2007 at 11:49AM PDT, ID: 19197064

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06.03.2007 at 07:05PM PDT, ID: 19205702

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07.04.2007 at 10:54AM PDT, ID: 19419858

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07.08.2007 at 08:30PM PDT, ID: 19442724

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06.01.2007 at 04:11AM PDT, ID: 19194157

Rank: Master

peterkehle,

It would be good to get your definition of annualized ROI, but try this.

ColA          ColB            
1 Jan 07    (500,000)
...
1 Jan 2011

=XIRR(B1:B48,A1:A48)

You will need to use some specific dates, instead of month 1, etc.

Hope this helps.
Scott
Accepted Solution
 
06.01.2007 at 11:49AM PDT, ID: 19197064
Using this formula I get a #num! error.  Does the date format matter?  I began with 7/1/2007 (which shows as 1-Jul-07) and continued for 48 months.  If not other suggestion on how to correct error?

Thanks,
Peter
 
06.03.2007 at 07:05PM PDT, ID: 19205702

Rank: Master

Peter,

The date format should not matter, as Excel will be using the underlying value (say, 1 Jan 2007 = 39083), rather than what is shown on the screen.

The #num error can occur if you use a value that is prior to the first value in the range, so if the first cell contains 1 Jan 2007, any values prior to this date will give this error.

You will also see the #num error if you do not have at least one positive and one negative amount.

You also need to have the same number of values in both your dates and amounts columns.

The other cause for the #num error is if the number of iterations used to get it to a precision of (i think) 0.0000001% exceeds 100 iterations.  Click on tools-->options-->calculations and change the number of iterations to a larger value.

The other likely error you might see is if one or more values are not dates, but a text string, and will give a #value error.  To test this, highlight the date range, press CTRL+1, and in the number category choose General.    They should all show up as 39083, 39114, etc.

Hope this helps.
Scott
 
07.04.2007 at 10:54AM PDT, ID: 19419858
No comment has been added to this question in more than 21 days, so it is now classified as abandoned.

I will leave the following recommendation for this question in the Cleanup topic area:
   Accept: scottr_gp {http:#19194157}

Any objections should be posted here in the next 4 days. After that time, the question will be closed.

Venabili
EE Cleanup Volunteer
 
07.08.2007 at 08:30PM PDT, ID: 19442724
Forced accept.

Computer101
EE Admin
 
 
20080716-EE-VQP-33