Internal Rate of Return

Example: Internal Rate of Return

A farmer buys 10 young cows and a bull for $4500. The first year he does not expect to sell any calves, he just expects to feed them. Thereafter, he expects to be able to sell calves to offset the cost of feed. He expects them to be productive for 9 years, after which time he will liquidate the herd. The internal rate of return is computed after 9 years.

using System;
using Imsl.Finance;

public class irrEx1
{
    public static void  Main(String[] args)
    {
        double[] pmt = new double[]
                          {- 4500.0, - 800.0, 
                              800.0, 800.0, 
                              600.0, 600.0, 
                              800.0, 800.0, 
                              700.0, 3000.0};
        
        double irr = Finance.Irr(pmt);
        Console.Out.WriteLine("After 9 years, the internal rate of " + 
                              "return on the cows is " + 
                              irr.ToString("P"));
    }
}

Output

After 9 years, the internal rate of return on the cows is 7.21 %

Link to C# source.