o calculate the actual rate of return on an investment accounting for varying cash flows, which Excel function is appropriate?  A. IRR  B. XIRR  C. NPV  D. FV

To calculate the actual rate of return on an investment that accounts for varying cash flows over time, the appropriate Excel function is B. XIRR.

Explanation:

1. IRR (Internal Rate of Return) calculates the return assuming equal time intervals between cash flows, which is not suitable for irregular cash flows.

2. XIRR (Extended Internal Rate of Return) is specifically designed to handle cash flows that occur at irregular intervals. This function requires a series of cash flows and the corresponding dates for those cash flows, making it the most accurate choice for the scenario.

3. NPV (Net Present Value) is used to determine the present value of a series of cash flows, but it does not calculate a rate of return.

4. FV (Future Value) calculates the future value of an investment based on a specified interest rate and compounding periods, which is not the aim in this context.

Final Answer:

B. XIRR is the appropriate Excel function for calculating the actual rate of return on an investment with varying cash flows.