IRR Function in Excel: Return of Regular (Periodic) Cash Flows

IRR Function in Excel: Return of Regular (Periodic) Cash Flows featured illustration

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⏱ 2 min readUpdated 5 October 2026

FinancialLevel: ExpertAvailable in: Excel 2007+

In this article
  1. Syntax
  2. Examples
  3. Example 1
  4. Common errors and fixes
  5. IRR in practice
  6. Where you will use it
  7. Worked example
  8. Mistakes people make
  9. Related functions
  10. Continue learning

IRR returns the rate at which the NPV of regular, equally spaced cash flows is zero. For irregular dates use XIRR.

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Syntax

=IRR(values, [guess])
Argument What it means
values Cash flows; first is usually the negative investment.

Examples

Example 1

=IRR(B2:B7)

Project return from yearly cash flows −10L, 2L, 3L, 3.5L, 3L, 2L.

Common errors and fixes

You see Why, and the fix
#NUM! No sign change in the cash flows, or it can’t converge — give a guess like 10%.

IRR in practice

Where you will use it

  • Return of a project with uneven cash flows
  • Compare investments
  • Check business-plan returns

Worked example

CaseFormulaResult
1=TEXT(IRR(INDEX($H$1:$L$3,A2,0)),"0.00%")17.09%
2=TEXT(IRR(INDEX($H$1:$L$3,A3,0)),"0.00%")12.83%
3=TEXT(IRR(INDEX($H$1:$L$3,A4,0)),"0.00%")10.00%

Results calculated in Excel.

Mistakes people make

MistakeWhat to do instead
Missing the initial outflowFirst cash flow must be negative
Dates unevenUse XIRR

XIRR · NPV · MIRR

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📎 Practice files for this article

  • 📗
    Practice workbook: Financial: EMI, SIP, NPV, IRR, depreciation23 tasks on realistic sales data — type your formula, the Check column turns green when it is right. Answers sheet included.
    ⬇ XLSX · 35 KB

Free to use for learning. Files with macros (.bas) are plain text — import them with Alt+F11 → File → Import File, and always test on a copy.

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