Assuming a CF sequence of -,+,+,+,+... the calculation of IRR using IRR or XIRR depending on the periodicity of cashflows is straightforward.

Also, I am aware that assuming a CF sequence of something like -,+,+,-,+... the IRR calculation can return multiple results.

My question is specifically regarding a cashflow sequence of -,-,-,+,+,+,+,+... where you see multiple years of investment building a large scale project, followed by multiple successive years of income.

Can anyone explain to me how the IRR calculation works in the scenario where CF1, CF2 etc. could be just as negative as CF0? Is it correct to allow the IRR calc to discount CF1 and CF2 when they are also negative?

Very much appreciate any insights you can offer.

Kind Regards,


  • $\begingroup$ The number of solutions is based on the number of changes in sign. If initial cash flows are negative and then change to positive, that is one change in sign and therefore the IRR exists and is unique (one solution). $\endgroup$ – Alex C Jul 30 '18 at 13:45

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