Texas Instruments Calculator - Manual (Page 50)

46 Cash Flow Worksheet
Computing IRR and MOD
1. Press ). The IRR variable and current value are displayed (based on
the current cash-flow values).
2. To compute the internal rate of return, press %. The calculator
displays the IRR value.
3. To select the reinvestment rate ( RI ), press #.
4. Key in the reinvestment rate value and press !.
5. To compute the modified internal rate of return, press #. The
calculator displays the MOD value.
When solving for IRR , the calculator performs a series of complex,
iterative calculations that can take seconds or even minutes to complete.
The number of possible
IRR solutions depends on the number of sign
changes in your cash-flow sequence.
• When a sequence of cash flows has no sign changes, no IRR solution
exists. The calculator displays Error 5 .
• When a sequence of cash flows has only one sign change, only one
IRR solution exists, which the calculator displays.
• When a sequence of cash flows has two or more sign changes:
– At least one solution exists.
– As many solutions can exist as there are sign changes.
When more than one solution exists, the calculator displays the one
closest to zero. Because the displayed solution has no financial
meaning, you should use caution in making investment decisions
based on an
IRR computed for a cash-flow stream with more than
one sign change.