Excel’s IRR and XIRR functions are often used to calculate the rate of investment returns. In this post, let us discuss the limitations of XIRR and IRR functions.
Credit: This discussion is inspired by financial planner Mr. Hari who posted a video describing the limitations of IRR and XIRR on my XIRR calculator page. The video (a must watch for finance professionals) is linked below.
A couple of weeks ago, when the Chit fund returns calculator was published, I had mentioned that, for any investment, if the amount invested is less than the amount received, it might not be possible to calculate the rate of return.