XIRR in Real Estate Financial Modeling. But I want to reiterate: it is only a coincidence that Excel IRR does not need a "guess" when used with your example. IRR – Real Estate Financial Modeling // If you’re a real estate analyst or you’ve done a good amount of real estate financial modeling or real estat. XIRR for less than 365 Days Formula ( Originally Posted: 10/08/2018) XIRR by default is an annualized return. The main difference between the NPV and the XNPV functions is that the values input in the NPV function are equally spaced in terms of time period, whereas the values input in the XNPV function are. For the same reasons as noted above in this guide, it’s equally important to use specific dates when calculating the internal rate of return on an investment. XIRR in mutual funds. 0. IRR is the discounted rate of all future expected cash flows of an investment or project. Description Returns the internal rate of return for a schedule of cash flows that is not necessarily periodic. It is attained when the Net Present Value (NPV) of the project amounts to zero. In other words, it is the expected compound annual rate of return that will be earned on a project or investment. vba. Really the output just needs to be something that you can understand intuitively. But sometimes, it should be treated the same as #NUM, which indicates that XIRR needs a "guess" to help its internal algorithm. It simply tells you the amount of money you have earned or lost. So, yes, you might examples where someone who claims to be knowledgeable calculates a compounded IRR and incorrectly calls it the YTM. i probably use this the most. When the return is negative, the XIRR function returns zero. In such cases, IRR represents more accurate value. All NPV, IRR, MIRR, XIRR and XMIRR are used to analyze investments and to choose between 2 investments. Does anybody really expect to know what day cash will be received / spent next year let alone in 2050? Explore, with the customer, working with quarterly/annual assumptions which will make the calculation much easier and still be more precise than. IRR goes from 17% if calculating annual cash flows, to 572% if calculating monthly cash flows! Seems too high, so I wanted to check with the experts ;-) Also, please confirm I can always use XIRR or XNPV (instead of IRR and NPV) to build a template, in case there are any variations/inconsistencies in timelines. Hax to Save Tax: 💸DEMAT Zerodha:. You can convert from XIRR to IRR only if you calculate if your base is days. I thought I could de-annualize for period IRR to decrease with the extra month. As you say, this because XIRR presumes daily compounding based on the exact dates. These measures allow an investor to find out the rate of return he is earning on his investment. As real-world investments often involve irregular cash flows, XIRR is a more versatile and realistic metric. The Internal Rate of Return (“IRR”) is the rate (“r”) at which the Net Present Value (“NPV”) of all future cash inflows and outflows (“CF”) for a project is zero. CAGR represents the smooth average annual growth rate of an investment, assuming that it has grown at a steady rate over the specified period. The IRR formula stands for the internal rate of return. To further illustrate how contributions and withdrawals impact the IRR, let’s assume that the investor invested the $50,000 a year earlier. IRR vs XIRR – Excel Template. So, when it. 5. Calculating the internal rate of return can be done in three ways: Using the IRR or XIRR XIRR FunctionThe XIRR function is categorized under Excel Financial functions. Typically, the IRR is only known for sure after more than a decade of investing. 05)12 -1 = 79. I’ll explain the differences here and which one you should be using in your underwriting model. And MIRR solves two of them: 1. The XIRR formula is much more flexible and is based on the dates of the cash flows for the project. Suitable for lumpsum investments. CAGR = (Final Investment Value/Initial Investment Value)^1/n – 1. XIRR (values, dates, [guess]) The XIRR function syntax has the following arguments: Values Required. If we adjust the returns so that the CAGR is 20%, we get. 5%. The XIRR function calculates the internal rate of return for a series of cash flows that occur at irregular intervals. In this example 5% is the estimated return. The IRR and XIRR functions allow you to enter a guess as the beginning rate where the function starts calculating incrementally, up to 20 cycles for the IRR function and 100 cycles for the XIRR function, until an answer within 0. Typically, the higher the IRR, the more profitable an investment will be. ROI indicates total growth, start to finish, of an investment. Overview of IRR vs. As a basic primer, both the IRR and XIRR functions aim to figure out the discount rate that should be inserted in the present value formula so that when you discount the future cash flows to the present and add them together, they equal the assumed purchase price in time period. Enter a series of dates where cash flows move in or out of an investment plus the amounts, and the tool will tell you the annualized rate of return. xirr assumes uneven cashflows and basically computes the exact discount factor for each cashflow based on daily discounting using a 365 day calendar. It is an extension of the Internal Rate of Return (IRR), which considers equally spaced cash flows. Also The first Value must be a Negative value. I am getting substantially large variation in XIRR vs IRR calculations. You see this most often on car loans. XIRR and CAGR represent returns from your mutual fund investments, but their applications differ. 1 person found this reply helpful. depend on the coupon frequency. You can see when we try to find out the internal rate of return in cells using the XIRR function in cell D13, it gives a value of 179%. This way you can calculate IRR using the IRR function for monthly cash flow in Excel. MIRR is a modification of the IRR calculation and is a more accurate reflection of the true rate of return for a series of cash flows. Learn how to calculate the internal rate of return (IRR) and the extended internal rate of return (XIRR) in Excel with formulas, examples and infographics. 11) with an 11% guess. ( =XIRR (Values, Dates, [guess])) Step 5: After writing =XIRR, select all values or transactions, add a comma, select all dates, and click on enter. The XIRR function formula in Excel is as follows: =XIRR (values, dates, [guess]) In order for the formula to work properly, you must enter the cash inflows and outflows directly in line with the corresponding dates – otherwise, the calculated IRR will be incorrect. IRR. XIRR returns the effective annual. This step by step tutorial will assist all levels of Excel users to learn how to calculate the monthly IRR in Excel. To compute the MIRR, the Excel function uses the following parameters: The values. Fundamentals of Analyzing Real Estate InvestmentsLearn professional investment analysis techniques for real estate investing in residential and commercial propertiesRating: 4. Return : {108150. Although both formulas are used to measure the rate of return on an investment, there are some notable differences between them. But what's the difference between these two when used for capital budgeting ra. While I could just look at the XIRR of each individual investment, the size of those investments may differ substantially (e. Subsequent payments are discounted based on a 365-day year. XIRR (Extended Internal Rate of Return) is a financial metric used in the stock market to calculate the rate of return of an investment based on its cash flows. Only once the fund is fully realized can the IRR be labeled “final. You also need to convert your hurdle rate into monthly or quarterly increments (depending upon your model) to use as the "rate" in both the FV and NPV formula and. The difference is due to the fact that XIRR returns an effective interest rate (i. IRR - What's the Difference? — Top Shelf® Models REQUEST A FREE DEMO XIRR vs. With regular IRR, it assumes all cash flows occur on Dec 31, but with XIRR, we can tell Excel that the first cash flow is in the middle of the year. 00001% is found. or if I changed 31/12/23 payment from -300,000 to -400,000. If your cashflows are regularly spaced, then IRR is likely to be more accurate than XIRR. 2. = 100 * 20000/12000. IRR is the periodic rate of return - IRR uses 30/360 day count convention. MOIC is calculated by dividing cash inflows by outflows (i. dates – a range of dates corresponding to values. Then I broke these annual cash flows into quarterly cash flows by dividing each annual cash flow by 4 assuming cash inflows and outflows occur at the end of each quarter, and used the XIRR function to calculate the IRR based on the quarterly. But what is the difference between them? First, we need to understand what the Inter. 93/90000)^ (1/6)}-1 = 3. In the first case, you earn a constant 6 percent p. Because of this, XIRR is a more accurate way to evaluate an investment. IRR is the time period for which they are used for calculating the performance of investments. 30 is used when the year is consider to have 360 days. Let us look at some of the key differences in IRR vs XIRR. XIRR vs. This document is how you can validate these two functions. If you get confused listening about Mutual fund returns, then, you are not alone. Had you used IRR instead of XIRR for your 40 quarterly cash flows, IRR would have returned the periodic quarterly rate closer to 1. the Gross Return in percentages. Aggregate CAGR of multiple mutual fund investments made within a period. Obviously, one discount rate may generate lower NPV than the. 5 total hours153 lecturesCurrent price: $119. You did receive many responses, but maybe they're all over your head, or you don't really mean what you wrote above. IRR Excel Function. So, CAGR shows that your investment of Rs. XIRR vs. XIRR offers more flexibility because it takes into account multiple cash flows at different points in time, whereas regular IRR does not. k. IRR is based on the principle that interim cash flows are reinvested at the project’s IRR. =IRR (continued). Step 3: Compare the IRR with the Discount Rate. Calculation: IRR is simple, use the built-in IRR or XIRR in. Calculates the returns of irregular cash flows. XIRR and IRR both calculate the internal rate of return from the investment's cash flows; the only difference is that the latter can only calculate the IRR for periodic cash flows. XIRR is an Excel function name that finds IRR for non-periodic cash flows, as such there is no term called XIRR When calculating IRR you may come across a number of different cases such as 1) Cash flows are all of equal lengths. I am saying that, in my mind, the question doesn't make much sense at all, for the reasons I outlined above. Vedant, the average annual return he got was 8. g In a portfolio of two companies: Investment A IRR = 90% based on a cost of $100. The IRR function. Hi - I'm having a hard time determining the IRR on a project with cashflows that are sometimes positive (+) and sometimes negative (-). IRR is comparatively less precise in calculating the rate of return. By contrast, the XIRR formula considers the dates when the cash flow actually happens. 93/90000)^ (1/6)}-1 = 3. a. With IRR(), all cash flows are discounted using an integer number of compounding periods. Vedant, the average annual return he got was 8. #3 MIRR. By contrast, IRR is normally used to gauge the return of funds that invest in illiquid, non-marketable assets—such as buyouts, venture, or real estate funds. On the other hand, total return is time-weighted return: the timing of cash contributions is irrelevant and total return captures solely the market performance during a specific. In this article, we will explain the main differences from a financial modeling point of view when using the IRR vs XIRR Formula in Excel. The drawback to the IRR function is that Excel assumes each cell is separated by precisely twelve months, which is not always the case. 5%. By contrast, the XIRR formula considers the dates when the cash flow actually happens. By contrast, the XIRR formula considers the dates when the cash flow actually happens. Calculates the returns of constant investments. The accuracy of MIRR is more than. compound the IRR by the number of periods per year to get an annual rate. It considers time value of money. Data Tables & Scenario modeling is one of the 50 ways to analyze data in Excel. Typically, the higher the IRR, the more profitable an investment will be. Once ready, press "Calculate" and our Internal Rate of Return calculator will output: the Internal Rate of Return, a. It is commonly used to analyse the financial performance of an investment. This results in a 10% IRR, and a gross profit of 1,100,000 – 1,000,000, or 100,000. If omitted, Excel takes the default value of 10%. 0 = NPV Σ CF n ÷ (1 + IRR)^ n; XIRR vs. The Excel formulas, =IRR and =XIRR, are designed to. IRR vs XIRR The XIRR vs IRR refers to the Extended Internal Rate of Return and the Internal Rate of Return, respectively. Re: Solver vs IRR. 59 percent. XIRR allows you to assign a date to each individual cash flow. In this case the cash flows do affect the calculations. Between XIRR and IRR, the XIRR function calculates non-periodic cash flows accurately by considering different dates, whereas IRR calculates cash flows within an. XIRR stands for Extended Internal Rate of Return is a method used to calculate returns on investments where there are multiple transactions happening at different times. You can easily use the XIRR function in Excel to calculate. e. (xirr has dates). Steps for using Excel’s XIRR function: Click the f x function in Excel. Internal rate of return (IRR) is the percentage of returns that a project will generate within a period to cover its initial investment. The calculation of IRR makes use of the time period of the investment and the cash flows over that time period. g In a portfolio of two companies: Investment A IRR = 90% based on a cost of $100. Hence, for this reason, most platforms show the absolute return for SIPs less than a year, rather than XIRR. IRR vs. Key Takeaways. See examples, formulas, and tips for business accounting. XIRR Vs. Excel uses an iterative technique for calculating XIRR. 8% as the investor would have had a larger portfolio during the third year, when the annual performance was negative. If you’re a real estate analyst or you’ve done a good amount of real estate financial modeling or real estate financial analysis, you know that the internal rate of return, or IRR, calculation, is an extremely important return metric in real estate financial modeling. I've got a bit of time so, here it is - complete C# code for XIRR calculation:There are five: NPV function, XNPV function, IRR function, XIRR function, and MIRR function. If the investment was valued at $300 after three years, then the IRR would be 44. Thank you very much for your help! The formula works great, although I have made a few tweaks to include: - a terminal value (from the [equity repayment/(investment) on sale] column) to be calculated at the end of each period and calculated in the XIRR calc (i. XIRR vs CAGR. Most times. What differs between the two formulas is what you are communicating to Excel by selecting one over. Does calculating an IRR monthly vs yearly make a difference? What about the question of whether to use the beginning or end of period? This article and video use the XIRR (and XNPV) process introduced by Microsoft Excel in 1997 to show why monthly calculation is important, and using the XIRR (and XNPV) means the question of beginning or end of. The XIRR formula is a complex Excel function that facilitates the calculation of internal rate of return (IRR) for irregular cash flows. In Mr Vedant’s case, this is how it gets calculated. All NPV, IRR, MIRR, XIRR and XMIRR are used to analyze investments and to choose between 2 investments. IRR in Excel. compounded annually) which provides a mechanism for reliable comparison of interest rates. And now you have your IRR In a percentage format. Hence I have handled sorting of the dataframe internally. The fact is IRR figures don’t inform investors about the two points above. The calculation of NPV is made in absolute terms as compared to IRR which is computed in percentage terms. Applying XIRR Function. Convert a monthly IRR to annualized IRR with the following equation, with “r” representing the monthly IRR: annualized IRR = (1 +. =XIRR (C5:C12,D5:D12) After pressing ENTER, we get the output in cell D14. If I use Excel's XIRR function with the starting outflow and ending inflow I also get 7. This will be the case with any volatile investment such as equities. Together, MOIC & IRR can help paint a better picture when evaluating PE performance. XIRR is more accurate than IRR, as it accounts for the dates of cash flows and discount rates. So now, you will hold 600 shares. ”. XIRR. Compare the key differences between these two functions, such as cash flows, dates, guess and inflation rate. It is important to be careful while selecting your. While CAGR simply uses the beginning and ending value, IRR considers multiple cash flows and periods—reflecting. In other words, the. An Extended Internal Rate of Return (XIRR) calculates the total current value of an investment by applying a single rate of return to each instalment (or redemption). and then use XIRR to calculate the internal rate of return with the formula =XIRR(B2:B4, A2:A4), it would say I have a return of 56. It doesn't have external dependencies and works faster than any existing implementation. XIRR is the most accurate when you have known dates, which generally isn't until the investment is. To calculate the IRR value, we can also use MIRR and XIRR functions and also use the conventional formula. If you are in the commercial real estate business, understanding the difference between XIRR vs IRR is vital. So, for Mr. The main difference between Excel XIRR and IRR functions is this: IRR assumes that all the periods in a series of cash flows are equal. for the last 10 years. To clearly see this, replace the discount rate of 10% in cell B2 with 15%. IRR and Cash-on-Cash or Money-on-Money multiples are related, but often move in opposite directions when the time period changes. Also "XIRR" returns approx 72% which is what I Get by using a periodic formula against each Cash Flow. 05) In this case, the net present value is about $190. If I’m in rush or want to get a ballpark estimate, I’ll simply google “IRR calculator. This measurement of return is the simplest and it does not consider the time period. IRR and simple ROI. Internal rate of return is a discount. IRR (values, [guess]) The IRR function syntax has the following arguments: Values Required. IRR In Real Estate Financial Modeling – Don’t Make This Mistake. 25%, we need to look at the nominal rate, calculated in F10. The Excel formulas, =IRR and =XIRR, are designed to calculate the IRR under different scenarios. So, if you did this investment in 1 day, it would be an outstanding return. the same IRR as generated at the initial exit. SAP Effective Interest Rate is MS Excel XIRR function according to SAP Note 839381 . The XIRR formula is the modification of IRR (Internal Rate of Return) and factors irregular periods. . So, the XIRR obviously has problems when the first value or values are. An irr across 10000 periods (30 years by day) involves solving a polynomial of order 10000. Excel XIRR Function → The Excel XIRR function is preferable over the IRR function as it has more flexibility by not being restricted to annual periods. There is a function very similar to the function of extended internal rate of return, and it is essential to avoid getting confused. Unfortunately, these investment decisions. 907% shows that the fund grew at the rate of 2. Calculation of XIRR (Extended Internal rate of return) in case of inconsistent cash flows. IRR, or the internal rate of return, is defined as the discount rate at which the net present value of a set of cash flows (ie, the initial investment, expressed negatively, and the returns, expressed positively) equals zero. According to the Microsoft Office documentation, “XIRR is closely related to XNPV, the net present value function. Investment B IRR = 20% based on a cost of $10,000). The point is, the notion of a CAGR cannot be used when returns fluctuate and when periodic investments are made. Then myrange is defined as A1:A3,B2. or if I changed 31/12/23 payment from -300,000 to -400,000. The slight difference in IRR vs XIRR is due to the fact that 30/360 day count is applicable in IRR calculation whereas an Actual/365 day count is applicable in XIRR calculation. Author | Investor | MBA. It looks like this: =DATE (2004,8,16) where 2004 is the year, 8 is the month, and 16 is the date. Hence, NPV = Cash flow over the time period/ (1 + r)^n = 0. In this case, the absolute return is 20%, which is intuitive for the vast majority. The IRR calculated based on these cash flows is $19. Now, you need to add the corresponding transaction date in the next column. The XIRR function. That is, since you hold 400 shares, half that number or 200 shares will be given to you. Here we calculate the discount rate or the IRR at which the Net Present Value of the investment becomes zero. CAGR smooths out any fluctuation, in returns, that might have occurred within each period and provides the annualized rate of return of an investment. The difference between the IRR calculation in Figure 2. Unlike the CoC return, however, IRR accounts for the time that an investor’s funds are tied up in a project. Last week we did IRR, and this week we'll be touching on XIRR and what it means when compared to IRR. Gross vs Net IRR: Calculation Differences. Here is a quick CAGR vs XIRR comparison table that highlights the differences: CAGR. A free video tutorial from Symon He. in monthly or other non-annual increments. If there are no flows to a portfolio, then you simply take the Ending Value (EV) and subtract the Beginning Value (BV) to get the gain (or loss), and then divide by that starting value. IRR Formula in Excel. XIRR weist jedem einzelnen Cashflow bestimmte Daten zu, sodass er beim Erstellen eines Finanzmodells in Excel genauer als IRR ist. Note: For greater precision, CFI recommends you use the XIRR function. If I change certain cashflows values I can get the values to align. CAGR. The top-ranked project based on IRR dropped to the tenth-most-attractive project. IRR Formula =IRR(values,[guess]) The IRR function uses the following arguments: Values (required argument) – This is an array of values that represent the series of cash flows. Next, press Enter. . discount rate. I'm attempting to calculate IRR (internal rate of return) for non-periodic cashflows using R (similar to the Excel function named XIRR). And now you have your IRR In a percentage format. NPV = (Today's value of the expected future cash flows) - (Today's value of invested cash) Broken down, each period's after-tax cash flow at time t is discounted by some rate, r. I understand this is a limitation of the XIRR formula (through google searches), but I can't find a proper alternative to the XIRR formula. As a check, given i = IRR and x = XIRR, I would expect that (approximately): x ≈ (1+i)^4-1 i. The function will calculate. If the first value is a cost or payment, it must be a. Note that if you have other cashflows in and out, it gets a bit more complicated (e. Where: CF = cash inflow. Select A1:A3, press Ctrl and click on B2. redemptions shall be marked positive. investment. 67%. Created a package for fast XIRR calculation, PyXIRR. Below is an example of regular IRR versus XIRR, with a series of six cash flows. The XIRR formula is much more flexible and is based on the dates of the cash flows for the project. Cash flows include investment and net income values. There are five: NPV function, XNPV function, IRR function, XIRR function, and MIRR function. For the given cash flows, the IRR is not unique; see Multiple IRRs. Both give an overview of the profitability of an investment. So, when it comes to XIRR vs. Distributions in the first tier can either be pari-passu and pro rata based on the partners’. IRR measures the performance of private fund managers. We have. a. If you are new to Excel and finance you will come across the =XIRR() function and find yourself wondering why it generates a different outcome when compared against the =IRR() function. The overall IRR. Mutual fund companies use internal rates of return to estimate the performance of a mutual fund over a given period. Pooled Internal Rate Of Return - PIRR: A method of calculating the overall internal rate of return (IRR) of a portfolio of several projects by combining their individual cashflows. That’s because the IRR function in Excel calculates the internal rate of return over annual periods at the end of the year. 10%. dates – a range of dates corresponding to values. So to give a high level overview, The IRR and XIRR are important functions used frequently in real estate financial modeling and it’s used to calculate the Internal Rate of Return over an investment hold period. YTM measures the total return over the bond’s life, while IRR measures the rate of return on investment. i use this function the least. The similarities between internal rate of return and rate of interest are stated below −. The more explicit answer to your question is, it depends on your cash flows. How much returns have you earned?. This is a short video with introduction to IRR or Internal Rate of Return and a working example on excel and power bi. 3. More detail on the post. Suppose you have 2 options, invest 10,000 in fund A and get ₹ 50,000 return or invest in fund B and get a 1,00,000 return. Using a changing rate (starting with [guess]), XIRR cycles through the calculation until the result is accurate within 0. $endgroup$ –Your basic question was why the apparent difference between your irr of . Next, input the following formula to calculate the 1 + Return value. XIRR is the most accurate when you have known dates, which generally isn't until the investment is. 99. It is called “financial leverage, “gearing,” or “financial. 76%. Ivan Kitov. Use of XIRR Function for Monthly Cash Flows. NPV - Commercial Real EstateTrying to figure out the difference between the IRR vs NPV in real estate investing? In this video, we’ll talk about the. After all, $1 today is worth more than $1 ten years from now. There are no dates behind it. XIRR. 93%The calculation will go as follows: (1 + . The IRR formula only requires you to select the series of cash flows to calculate the IRR. MIRR where dates are taken into account is called XMIRR. The internal rate of return (IRR) also measures investment performance. 25%/4 is a simple (nominal; non-compounded) rate. The most important distinction between CAGR and IRR is that. Likewise, if you have a quarterly model, (1+IRR ())^4-1 is the more accurate function. We can help XIRR. If A1 were 7-Aug-14 ("6-Aug-16" - 730), XIRR would return about 23. However, we know in business that this is not always true. IRR measures the total return on an investment, and it weighs early cash returns more heavily. Let us look at some of the key differences in IRR vs XIRR. These measures allow an investor to find out the rate of return he is earning on his investment. If I changed the 31/12/2027 payment from -50,000 to 1, the IRR and XIRR align to -2. 3 – XIRR and CAGR are the. So. So if your goal is to evaluate your portfolio's performance, you want to use Total Return or TWR, Modified Dietz. MOIC vs. An IRR higher than the discount rate signifies a profitable investment opportunity. Now, we would simply apply the IRR function to calculate the CAGR, as shown below: The CAGR we get is: Let’s do reverse engineering to check if the resulting value is correct or not. . It assumes that positive cash flows are reinvested based on the cost of the capital of the firm. The difference to the examples before is that the first years value is 0 or empty. Hi all I am reviewing a spreadsheet and trying to compare results between IRR and XIRR. Payments are expressed as negative values and income as positive values. XIRR Vs IRR. We can help Again, the XIRR function incorporates both the dates and the amount of the cash flows. The conventional formula is the NPV formula which we describe at the start of the article. In the above examples we calculated XIRR on excel. Using a calculator, we see that the IRR of this investment would by approximately 15. Note: Cash flows are specified as negative, positive, or zero values. Xirr Vs Irr. Financial caution This is a simple online calculator which is a good starting point in estimating the extended internal rate of return from an investment with non-period cash flows, it is by no means the end of such a process. IRR, you should always use XIRR unless you explicitly want to calculate the IRR over a yearly period. A: It helps to distinguish between the Internal Rate of Return (“IRR”) and the Excel formulas =IRR and =XIRR. 4. Loose transcription of the IRR Fully and Simply Explained Video. I run a comprehensive online class on data analytics, modeling and data science with Excel. Finally, in another cell, use the IRR formula on the previous four cells showing the purchase’s cash flow. In contrast to IRR, MIRR assumes that cash flows from a project are reinvested at the firm’s cost of capital (rate of return on a portfolio company’s existing securities). IRR is the rate of return at which NPV is zero or actual return of an investment. XIRR vs. XIRR vs IRR XIRR vs IRR Zašto koristiti XIRR vs IRR. The relevant code is: Dim CFArray () As Variant CFArray = Range ("Q22:Q24"). 1%, which is greater than the 10% required rate of return. IRR (internal rate of return) is the rate at which the net present value of an investment becomes zero. Both XIRR and IRR are Excel functions used to find the IRR of a project. IRR and XIRR are Excel functions that you can use to determine the rate of return on your investment. IRR vs XIRR. IRR vs XIRR day count convention. all this is saying is that you doubled your money. The result of this calculation is 16. A CAGR return assumes all investments have been made at the beginning of the year, while XIRR considers periodic instalments as separate investments. Step 1: Populate the Cash Flows.