Updated

- Fixed error and changed IRR -> internal_rate_of_return
- Included 2 more test cases

Author: yatshunlee

numpy_financial/_financial.py

@@ -827,38 +827,38 @@ def irr(values, raise_exceptions=False):
     # as eirr = g - 1 (if we are close enough to a solution)
 
     g = np.roots(values)
-    IRR = np.real(g[np.isreal(g)]) - 1
+    internal_rate_of_return = np.real(g[np.isreal(g)]) - 1
 
     # realistic IRR
-    IRR = IRR[IRR >= -1]
+    internal_rate_of_return = internal_rate_of_return[internal_rate_of_return >= -1]
 
     # if no real solution
-    if len(IRR) == 0:
+    if len(internal_rate_of_return) == 0:
         if raise_exceptions:
             raise NoRealSolutionError("No real solution is found for IRR.")
         return np.nan
 
     # if only one real solution
-    if len(IRR) == 1:
-        return IRR[0]
+    if len(internal_rate_of_return) == 1:
+        return internal_rate_of_return[0]
 
     # below is for the situation when there are more than 2 real solutions.
     # check sign of all IRR solutions
-    same_sign = np.all(IRR > 0) if IRR[0] > 0 else np.all(IRR < 0)
+    same_sign = np.all(internal_rate_of_return > 0) if internal_rate_of_return[0] > 0 else np.all(internal_rate_of_return < 0)
 
     # if the signs of IRR solutions are not the same, first filter potential IRR
     # by comparing the total positive and negative cash flows.
     if not same_sign:
         pos = sum(values[values>0])
         neg = sum(values[values<0])
-        if pos > neg:
-            IRR = IRR[IRR > 0]
-    else:
-        IRR = IRR[IRR < 0]
+        if pos >= neg:
+            internal_rate_of_return = internal_rate_of_return[internal_rate_of_return >= 0]
+        else:
+            internal_rate_of_return = internal_rate_of_return[internal_rate_of_return < 0]
 
     # pick the smallest one in magnitude and return
-    abs_IRR = np.abs(IRR)
-    return IRR[np.argmin(abs_IRR)]
+    abs_internal_rate_of_return = np.abs(internal_rate_of_return)
+    return internal_rate_of_return[np.argmin(abs_internal_rate_of_return)]
 
 
 @nb.njit(parallel=True)

tests/test_financial.py

@@ -680,6 +680,8 @@ def test_npv_irr_congruence(self):
         ([-100, 100, 0, -7], -0.0833),
         ([-100, 100, 0, 7], 0.06206),
         ([-5, 10.5, 1, -8, 1], 0.0886),
+        ([-10000, 4000, 200, 6800, -1000, 40000, -30000, -10000], 0.0000),
+        ([-10000, 4000, 2000, 1000, 3000], 0.0000),
     ])
     def test_basic_values(self, v, desired):
         assert_almost_equal(npf.irr(v), desired, decimal=2)
@@ -764,4 +766,5 @@ def test_irr_no_real_solution_exception(self):
         cashflows = numpy.array([40000, 5000, 8000, 12000, 30000])
 
         with pytest.raises(npf.NoRealSolutionError):
-            npf.irr(cashflows, raise_exceptions=True)
+            npf.irr(cashflows, raise_exceptions=True)
+