Internal Rate of Return in Advanced Portfolio

[Thomas Anderson]

On Fri, Nov 13, 2015 at 10:12:45PM +0000, Wm... wrote:
> I installed 2.2.7 on a spare Win XP system and a test suggests the IRR
> figures are reasonable.

I am on linux only systems and installing the needed (old) libraries for 2.2.7 looks painful if even
possible. I will try again tomorrow.

> 
> I used the flow in
> ===
> https://support.office.com/en-us/article/IRR-function-64925eaa-9988-495b-
> b290-3ad0c163c1bc
> ===
> rather than real data as my example and get
> 
> an IRR of   8.66% vs their   8.7% after 5 years
> an IRR of  -2.12% vs their  -2.1% after 4 years
> an IRR of -44.30% vs their -44.4% after 2 years (no user guesses)
> 
> which is close enough not to matter.

I'd lean towards the code being correct as well. There are iterative techniques in play here and
choosing a stopping criterion is needed; there may be a difference in how the code acts vs. Excel,
and even in what Excel says it is doing and what it is doing in actuality.

> 
> Generally I'm now thinking this might be a worthwhile addition.
> 
> A thought: presuming the IRR is a good number should it be added to the
> extant Advanced Portfolio report or should we make a new report?  I'm
> wondering if the Advanced Portfolio report isn't getting overloaded, people
> are moaning about corner cases already, I think.

I have been thinking about this more and I think one way to avoid corner cases with IRR is to
simply make it calculate XIRR. This handles the non-dividend contribution case easily. With IRR you
must have regular contributions/withdrawals which makes things less precise. The calculations are
not very different, as you can imagine.

As for putting it in a different report, perhaps, To my mind it may depend on how much
configuration IRR/XIRR needs at the report-level.

Regards,
Thomas
-------------- next part --------------
A non-text attachment was scrubbed...
Name: signature.asc
Type: application/pgp-signature
Size: 819 bytes
Desc: not available
URL: <http://lists.gnucash.org/pipermail/gnucash-devel/attachments/20151113/2d0814cd/attachment.sig>