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More About Calculations
IRR% Calculations
The calculator determines IRR% for a set of cash flows using mathematical formulas that “search” for the answer. The process finds a solution by estimating an answer and then using that estimate to do another calculation―in mathematical terms, this is called an iterative process.
In most cases, the calculator finds the desired answer, since there is usually only one solution to the calculation. However, calculating IRR% for certain sets of cash flows is more complex. There may be more than one mathematical solution to the problem, or there may be no solution. In these cases, the calculator displays a message to help you interpret what has happened.
Possible Outcomes of Calculating IRR%
These are the possible outcomes of an IRR% calculation for which you have not stored a guess.
!Case 1: The calculator displays a positive answer. This is the only positive answer. However, one or more negative answers may exist.
!Case 2: The calculator finds a negative answer but a single positive solution also exists. It displays:
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To see the negative answer, press <. To search for that positive answer, you must input a guess. (Refer to “Storing a Guess for IRR%”; below). There might also be additional negative answers.
!Case 3: The calculator displays a negative answer and no message.
238 B: More About Calculations
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