Updated over 4 years ago on . Most recent reply
IRR Calculations
I am trying to calculate the IRR and need help. If I want to buy a commodity, for instance, and store it for 5 months, how do I calculate the IRR the market is currently pricing? For example, if I buy Corn for $4/bushel today and sell the forward price 5 months out for $4.25, what is the IRR on that? Tks for the help.
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Bryan Hancock
#4 Off Topic Contributor
#4 Off Topic Contributor
- Investor
- Round Rock, TX
IMO an IRR calculation is not suitable for what you are doing. IRR assumes reinvestment of interim cash flows in projects with equal rates of return. I doubt this is the case for what you are doing.