IRR Property Development Calculation

Water Cooler Investing
#1

How do you calculate a) the NPV with an OCC of 10% / moderate risk and b) the IRR (assuming NPV > 0) for the following, as I am struggling, even using excel? Any help would be appreciated.

Here is the data (month and net positive cash flow values) I am using in my calculations (note that up to month 20 the cash flows are negative, but the sum of all the cash flows is positive: 1342). The OCC for my industry is about 10% for moderate risk.

Month 1 -£173 Month 2 -£24 Month 3 -£1374 Month 4 -£45 Month 5 -£97 Month 6 -£31 Month 7 -£31 Month 8 -£31 Month 9 -£31 Month 10 -£82 Month 11 -£141 Month 12 -£200 Month 13 -£259 Month 14 -£319 Month 15 -£321 Month 16 -£322 Month 17 -£323 Month 18 -£324 Month 19 -£326 Month 20 -£327 Month 21 £380 Month 22 £383 Month 23 £1221 Month 24 £1324 Month 25 £1427 Month 26 £941 Month 27 £449

#2

irr is the discount rate that gets npv=0

In excel just put all number in a single column or row and on a random cell write =irr(your_numbers)

What is occ?

#3

XIRR is the best function in excel I believe.

#4

He didnt show any defined timeline except for the month 1, month 2, etc, as in and equal length periods, using xirr there just meant you would have extra work fixing the timeline

#5

using xirr & irr functions would give you approx the same answer (within 4bps) you would either need to create dates to use xirr (suggest using BOM or EOM dates) or if you use irr you just need to annualize your return