20 April 2009
I'm stuck up to solve a problem relating to IRR or weighted return. there is investment(outflow) given for 10 years , revenue(inflows) are aslo given for 10 years. how 2 calculate weighted return for this investment? pls reply with details
21 April 2009
If the period is the same i.e. outflows and inflows relate to the same years take the net cash flow. IRR is concerned with net cash flow.
Suppose outflows and inflows for 5 years are: 1)-100,0; 2)-50,65; 3)-25,100; 4)-25,125; 5)-25,150 (outflows are negative and inflows are positive)
Net cash flows for the five years are: -100,15,75,100,125
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