Hello.
A few weeks ago, I need to calculate the Internal Rate of Return for irregular intervals.
There is the package 'financial', with the function 'cashflow', calculating irr for regular intervals.
So I developed xirr, managing irregular intervals, that's accepting a vector of dates as xirr Excel function.
You can find the code at
http://albertosantini.blogspot.com/2008/01/xirr.html#~ Title: XIRR Excel function simulation
#~
#~ Reference 1: How to manage irregular intervals -
http://www.geocities.com/accessreddy/excel/xirr.htm#~ Reference 2: How to calculate IRR manually -
http://www.s-anand.net/Calculating_IRR_manually.html#~
#~ Step 1: enter zeroes (0) against dates that do not have any cash outflow or inflows.
#~ Step 1bis: calculate IRR for these cash flow values using normal IRR function.
#~ Step 1tris: or using an iteractive approach as bisection method to find the NPV zeroes.
#~ Step 2: multiply this value of IRR by 365 to get annual IRR (since, these are daily cash flows).
#~ Step 3: refine using the formula =( 1+ R / 365) ^ 365 - 1), where R is the the value obtained in Step2.
#~
Regards,
Alberto Santini
