Why cash-flow signs matter for IRR

IRR is the periodic discount rate that makes net present value zero. Paying 1,000 initially and receiving 1,210 two periods later gives cash flows −1000, 0, 1210 and a periodic IRR of 10%.

This tool accepts an initial negative cash flow followed only by nonnegative flows. Later outflows can create multiple sign changes and multiple IRRs, so the tool does not select an arbitrary root in that case.

Intervals must be regular. Placing irregularly dated transactions into approximate monthly slots changes the problem. Check that periods per year matches the actual cash-flow interval before interpreting an annualized result.