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#!/usr/bin/env ruby # Ruby Quiz 156: Internal Rate of Return # Jesse Merriman require 'rational' # Guess a new number between a lower and upper bound. def guess lower, upper if upper == 1.0/0.0 lower < 0 ? 0.to_r : (lower + 1) * 2 elsif lower == 1.0/0.0 - guess(-upper, -lower) else (lower + upper) / 2 end end def nvp cash_flows lambda do |irr| t = 0 cash_flows.inject { |sum, c| t += 1; sum + c / (1 + irr) ** t } end end # Calculate the IRR to within 1 / 10**accuracy def irr nvp, accuracy = 4 lower, upper = -1.to_r, 1.0/0.0 while (lower - upper).abs > Rational(1, 10 ** accuracy) g = guess lower, upper nvp[g] > 0 ? lower = g : upper = g end (lower + upper) / 2 end class String def to_r if m = /^(\-?\d+)$/.match(self) m[1].to_i.to_r elsif m = /^(\-?\d+)\.(\d+)$/.match(self) m[1].to_i + Rational(m[2].to_i, 10 ** m[2].length) elsif m = /^(\-?\d+)\s*\/\s*(\d+)$/.match(self) Rational m[1].to_i, m[2].to_i else raise StandardError, "Can't parse #{self} to a Rational" end end end if __FILE__ == $0 cash_flows = ARGV[0..-2].map { |x| x.to_r } accuracy = ARGV[-1].to_i nvp = nvp cash_flows if nvp[0] < nvp[1] puts 'Cannot find IRR.' else i = irr nvp, accuracy puts "irr: #{i} (#{i.to_f})" end end

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