XIRR function in Excel. Why it is better than the IRR function and how to use it

Follow Along File- https://auditexcel.co.za/product-down...
00:00 Intro to XIRR vs IRR
00:10 XIRR in the function wizard
00:45 Benefits of XIRR vs IRR (different time periods)
01:03 Why XIRR is slightly different for IRR

Pros
Easy to use
Can have mixed time periods

Cons
Same constraints as normal IRR of whether it is a useful measure of return

Similar to NPV, IRR has an XIRR function which, in our opinion, is a better function.

To follow along go to 17.11

For XIRR you need to identify the cash flows (including the initial cash flow) and the dates of the cash flows as shown below. You can also specify a guess.

The XIRR does not need equally spaced cash flows as long as the dates reflect when the cash flows. You will note that the answer of 50.62% is slightly different from the IRR function (50.57%) as a result of it using the exact dates provided.