Rahul Patel Rahul Patel - 5 months ago 18
iOS Question

Calculate IRR (Internal Rate Return) and NPV programmatically in Objective-C

I am developing a financial app and require

IRR (in-built functionality of Excel)
calculation and found such great tutorials in
C
here and such answer in
C#
here.

I implemented code of the C language above, but it gives a perfect result when IRR is in positive. It is not returning a negative value when it should be. Whereas in Excel
=IRR(values,guessrate)
returns negative IRR as well for some values.

I have referred to code in above C# link too, and it seems that it follows good procedures and returns errors and also hope that it returns negative IRR too, the same as Excel. But I am not familiar with C#, so I am not able to implement the same code in Objective-C or C.

I am writing C code from the above link which I have implemented for helping you guys.

#define LOW_RATE 0.01
#define HIGH_RATE 0.5
#define MAX_ITERATION 1000
#define PRECISION_REQ 0.00000001
double computeIRR(double cf[], int numOfFlows)
{
int i = 0, j = 0;
double m = 0.0;
double old = 0.00;
double new = 0.00;
double oldguessRate = LOW_RATE;
double newguessRate = LOW_RATE;
double guessRate = LOW_RATE;
double lowGuessRate = LOW_RATE;
double highGuessRate = HIGH_RATE;
double npv = 0.0;
double denom = 0.0;
for (i=0; i<MAX_ITERATION; i++)
{
npv = 0.00;
for (j=0; j<numOfFlows; j++)
{
denom = pow((1 + guessRate),j);
npv = npv + (cf[j]/denom);
}

/* Stop checking once the required precision is achieved */
if ((npv > 0) && (npv < PRECISION_REQ))
break;
if (old == 0)
old = npv;
else
old = new;
new = npv;
if (i > 0)
{
if (old < new)
{
if (old < 0 && new < 0)
highGuessRate = newguessRate;
else
lowGuessRate = newguessRate;
}
else
{
if (old > 0 && new > 0)
lowGuessRate = newguessRate;
else
highGuessRate = newguessRate;
}
}
oldguessRate = guessRate;
guessRate = (lowGuessRate + highGuessRate) / 2;
newguessRate = guessRate;
}
return guessRate;
}


I have attached the result for some value which are different in Excel and the above C language code.

Values: Output of Excel: -33.5%
1 = -18.5, Output of C code: 0.010 or say (1.0%)
2 = -18.5,
3 = -18.5,
4 = -18.5,
5 = -18.5,
6 = 32.0

Guess rate: 0.1

Qiu Qiu
Answer

Since low_rate and high_rate are both positive, you're not able to get a negative score. You have to change:

#define LOW_RATE 0.01

to, for example,

#define LOW_RATE -0.5
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