Example Let me pose an exaggerated theoretical example of why you should evaluate managers using the time weighted rate of return rather than the IRR. Let’s say you have two managers, A and B ...

Internal rate of return (IRR) is one of several well-known formulas used to evaluate prospective investments, especially ones that generate cash flows, like in real estate.

2. Excel’s XIRR function. Excel’s XIRR function calculates a more accurate internal rate of return because it takes into consideration different-size time periods. To use this function, you must ...