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second IRR root

Posted on 2011-02-24
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Hi,
How do I produce the second IRR root when given a series of cash flows (more than 1 negative cash flow) in excel?

Thanks!
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Question by:maudette
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byundt earned 1000 total points
ID: 34971006
Excel only gives you one root with the IRR function.

You can tabulate the discounted cash flow with different interest rate assumptions, however, and see which interest rates drive the sum of cash flows to zero. A one variable Data Table is convenient for this purpose, as shown in the attached workbook.

Brad
SecondRootOfIRR-Q26844775.xlsx
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