👋 XIRR vs IRR: What’s the difference?

[Justin Goodin]

📈 XIRR vs IRR: What's the difference?

XIRR and IRR are used to find the IRR of a project.

But what is the difference between them?

The XIRR and IRR functions in Excel are nearly identical besides one critical difference:

✔️ Timing Assumptions

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The IRR formula assumes there are equal time periods of a year between the cash flows of a project.

The XIRR formula is much more flexible and is based on the dates of the cash flows for the project.

Bottom Line: We recommend using XIRR.