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irr.m

## Copyright (C) 1995, 1996, 1997  Kurt Hornik
## 
## This program is free software; you can redistribute it and/or modify
## it under the terms of the GNU General Public License as published by
## the Free Software Foundation; either version 2, or (at your option)
## any later version.
## 
## This program is distributed in the hope that it will be useful, but
## WITHOUT ANY WARRANTY; without even the implied warranty of
## MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the GNU
## General Public License for more details. 
## 
## You should have received a copy of the GNU General Public License
## along with this file.  If not, write to the Free Software Foundation,
## 59 Temple Place - Suite 330, Boston, MA 02111-1307, USA.

## usage:  irr (p [, i])
##
## Computes the internal rate of return of a series of payments p from
## an initial investment i, i.e., the solution of npv (r, p) = i. If the
## second argument is omitted, i = 0 is used.
##
## See also:  npv;  pv, rate.
  
## Author:  KH <Kurt.Hornik@ci.tuwien.ac.at>
## Description:  Internal rate of return of an investment

function r = irr (p, i)
  
  if (nargin == 1)
    i = 0;
  elseif !(nargin == 2)
    usage ("irr (p [, i])");
  endif
  
  tmp = output_precision;
  output_precision = 15;
  if !(is_vector (p))
    error ("irr:  p must be a vector");
  else
    p_string = type p;
  endif

  if !is_scalar (i)
    error ("irr:  i must be a scalar");
  endif
  
  string = ["function delta = f (r) ", ...
      "delta = npv (r, %s) - %g;  end"];
  eval (sprintf (string, p_string, i));

  r = fsolve ("f", 0.01);
  
  output_precision = tmp;
  
endfunction

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