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Investment Analysis: IRR Comparison Tool (Excel XLSX)

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HIGHLIGHTS

Author: Jason Varner | SmartHelping

Immediate, digital download

File Type: Excel workbook (XLSX)

DOCUMENT DESCRIPTION

This product (Investment Analysis: IRR Comparison Tool) is an Excel workbook (XLSX), which you can download immediately upon purchase.

Tracking IRR by way of using the 'XIRR' function in Excel can be tricky when you are looking at multiple cash flow streams with different start dates. You can't just drag the formula down, it needs to dynamically reference the date and cash flow when those cash flows start (the column they begin in) and as you change start dates, the XIRR formulas needs to also change. This template has the indirect function logic to handle such an analysis.

This model is designed to compare various projects that you plan on doing within a given company or separate projects. The point is to compare up to 19 different cash flow streams based on their monthly cash inflows and outflows for up to a 20 year period.

There is a dashboard that displays the IRR of each project (XIRR was used and in order to not get errors, the indirect formula was utilized so each cash flow stream could be properly calculated no matter when the cash started / stopped on the same timeline.

On the dashboard, the user can input the required rate of return and if the IRR is higher than that, it will turn green, otherwise red. A visual displays the results as well. The user can configure cash flows based on a start / stop month, the initial investment, monthly cash flows, exit value.

If these data structures don't fit exactly with your cash flows, simply go to the ‘monthly cash flow' tab and hard code in your expected cash inflows and outflows manually. The calculations will still run off of that.

The purpose of the ability to configure this instead of hard code in each stream is for quicker analysis of many projects.

Finally, if these are all independent projects, the final XIRR calculation will display the consolidated IRR for all projects on the same timeline.

Got a question about the product? Email us at [email protected] or ask the author directly by using the "Ask the Author a Question" form. If you cannot view the preview above this document description, go here to view the large preview instead.

Source: Best Practices in Business Case Development Excel: Investment Analysis: IRR Comparison Tool Excel (XLSX) Spreadsheet, Jason Varner | SmartHelping

ABOUT THE AUTHOR: JASON VARNER | SMARTHELPING

I graduated in 2011 with a Bachelors degree in Accounting. From there, I worked at a few small businesses doing financial reporting and some bookkeeping. After a few years of that, I started doing freelance financial consulting work on Elance and Upwork.

After over 400 jobs completed with a 100% success rate, I now run my own modeling/consulting practice and continue to build new financial models every few weeks. [read more]

Jason Varner | SmartHelping has published 120 additional documents on Flevy.

DETAILS

File Type: Excel (xlsx)

File Size: 362 KB

Related Topic(s): Business Case Development

This business document is categorized under the function(s): Corporate Finance

It applies to All Industries

Purchase includes lifetime product updates. After your purchase, you will receive an email to download this document.

Initial upload date (first version): Nov 30, 2022
Most recent version published: Dec 2, 2022

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