Total cash flow with terminal value will be in the row “Total”. In rows, we have free cash flow without terminal value, while the terminal value will be calculated in the cell H4. Let’s look at the structure of the data we will use. Setting up Our Data for the IRR Function with Terminal Value If it’s omitted, the function will take a default value of 0.1 (=10%).
The investment must have a negative sign, as it is a cost The generic formula for the IRR function is: The result of the IRR function Syntax of the IRR Formula
This step by step tutorial will assist all levels of Excel users in getting an IRR of the free cash flow with the terminal value.įigure 1. Learn How to Calculate an IRR with a Terminal Value in ExcelĮxcel allows a user to calculate an IRR with a terminal value using the IRR function.
