Question

I am seeking a point of view on a valuation issue we are currently debating at work. A comment was made that the XIRR function incorrectly calculates the IRR when the terminal value is a perpetuity growth. The reason being that the XIRR function in excel can solve for IRR correctly as long as none of the cash flows in the series are dependent upon the discount rate. That when one or more of the cash flows are dependent upon the discount rate, such as the terminal value when calulated usiong perpetuity growth, the XIRR function in excel does not calculate correctly because it takes the cash f