I'm trying to annualize a monthly IRR calculation where each of months 1-5 reflect negative cash flow, each of months 6-10 reflect positive cash flow, each of months 11-15 reflect negative cash flow, and each of months 16-20 reflect positive cash flow. I've been told that Excel's IRR function cannot accommodate changing signs such as these; is this correct? If not, what formula should I use to compute the monthly IRR and what formula should I use to annualize that monthly IRR on a compound basis?

Many thanks in advance.



Alan