# IRR vs XIRR  For eg:
Source: IRR vs XIRR (wallstreetmojo.com)

## Difference Between IRR vs XIRR

IRR function calculates the Internal Rate of Return on the cash flows after taking into consideration the discount rate and helps evaluate the return on investment over a period of time. On the other hand, XIRR function is the extended internal rate of return that takes into account not only the cash flows and discount rates but also the corresponding dates to accurately measure the return.

### IRR vs XIRR Infographics

For eg:
Source: IRR vs XIRR (wallstreetmojo.com)

### IRR vs XIRR Key Differences

1. Cash Flows: This is one of the primary differences between these two functions. IRR doesn’t understand when the actual cash flow happens, so assumes it as a year period, but with XIRR function it takes into consideration dates when actually cash flow happens.
2. Accurate Result: Unless there is a standard cash flow XIRR is always the best option to evaluate an investment, so if your cash flows are happening at any specific date then you can rely on IRR function or else you need to track dates and use XIRR function.

### Example

Let us show you an example to demonstrate the differences between these two functions. Ok, first we will calculate IRR function.

Mr A has invested some money in one of the projects, and below are the details we have for his investment.

Using these investment details, we will calculate the ROI.

Ok, first we will calculate IRR percentage.

The first argument of IRR function is to select the values, i.e. what are the cash inflows and outflows, so select the range of cells from C2 to C6.

So, the ROI for Mr X is 17.13%.

Now similarly open XIRR function.

For Values, the argument chooses cells from C2 to C6.

This is where the XIRR function is different from IRR function, and the second argument is Dates, i.e. what are the dates for , so choose the date range of cells from B2 to B6.

As usual, leave the last argument.

With XIRR function, we have got more ROI percentage because, with this function, we have taken into consideration specific date scheduled cash flows.

### Conclusion

Our conclusion is if you really want to know the internal rate of return you must have dates for each of your cash flows because this is where our time period will be considered and an accurate ROI percentage can arrive.

So, XIRR is a better option than the IRR function.

This has been a guide to XIRR vs IRR. Here we discuss the top difference between IRR and XIRR Function in excel along with infographics and comparison table. You may also have a look at the following articles –

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