IRR formula

[CKJackson]

I am looking for help with the following:
Assume this example:
Internal Rate of Return
$-5,000, $2,000,$2,000,$2,000,$2,000,$2,000
using =IRR(above sequence) I get an IRR =29%
What I am hoping for is to use "Solver / or a formula" to achieve the following.
I would like to find out what % to be multiplied by the cells following the $-5,000 will yield an IRR of 25% - from trial and Error I got 93% yielding
$-5,000,$1860,$1860,$1860,$1860,$1860
Is there a way to automatically calculate this?
The application of this is to determine what % of a project would yeild a "Set %" return on equity for an Investor partner

Cheers

Chris

 

[cornflakegirl]

Welcome to the board.

It sounds like you want to discount your cashflows at the required percentage, and then force the NPV to 0.

You can use Goal Seek to set the result of your NPV calculation to 0 by changing your factor cell (ie the one that contains 93%).

 

[shg]

You could use =PMT(25%, 5, -5000, 0) which returns $1859.23

 

[MickG]

If your "IRR" result is in "B1" and you place a 1 in "C1", then multiply each value apart from the first by "C1".
Then use "Sover" to Get the result in "B2 to 25% ( use 0.25 in solver)
By changing "C1" then you will get your Result.
Mick

 

[CKJackson]

MickG,

thanks mate! worked perfect using the Solver addon!

Cheers

Chris