Calculation of IRR

you have to try few discount rates till you find the one that makes NPV=0
Years

Cash Flow

0
1
2
3
4
5

-1
34
32.5
31.37
30.53
79.9

Discounting rate=20%
Discount factor
Present Value
1
0.833
0.694
0.579
0.482
0.402

-100
28.32
22.563
18.16
14.72
32.12

Discounting rate=24%
Discount factor
1
0.806
0.65
0.524
0.423
0.341

NPV=15.88

Calculation of IRR
Smaller disc.rate + NPV at smaller rate
Sum of the absolute values of the NPV
at the smaller and bigger disc.rate

24% +

5.13
(5.13+ 4.02)

* (28% - 24%) = 26.24%

* bigger disc rate - smaller disc rate

Discounting rate=24%
Discount factor
Present Value
-100
27.4
21.13
16.44
12.91
27.25

NPV=5.13

aller disc rate

Discounting rate=28%
Discount factor
Present Value
1
0.781
0.61
0.477
0.373
0.291

-100
26.55
19.83
14.96
11.39
23.525

NPV=-4.02