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tvm_irr

Read-onlyIdempotent

Compute the internal rate of return for a series of cash flows. Uses Newton-Raphson method to return IRR, annualized IRR, and NPV.

Instructions

Internal rate of return via Newton-Raphson. First cash flow is typically negative (investment).

Use when computing the internal rate of return for a cash flow series. Provide an array of cash flows. Returns: IRR (decimal), annualized IRR, and NPV at the computed IRR (should be ~0).

Input Schema

TableJSON Schema
NameRequiredDescriptionDefault
cash_flowsYesArray of cash flows (first is typically negative = initial investment)
Behavior5/5

Does the description disclose side effects, auth requirements, rate limits, or destructive behavior?

Annotations indicate read-only, idempotent, non-destructive behavior, which the description aligns with. Additionally, the description discloses the Newton-Raphson method and the specific outputs (IRR decimal, annualized IRR, NPV), adding valuable behavioral context.

Agents need to know what a tool does to the world before calling it. Descriptions should go beyond structured annotations to explain consequences.

Conciseness5/5

Is the description appropriately sized, front-loaded, and free of redundancy?

Two concise sentences front-loaded with the method and usage. Every sentence adds value without redundancy.

Shorter descriptions cost fewer tokens and are easier for agents to parse. Every sentence should earn its place.

Completeness5/5

Given the tool's complexity, does the description cover enough for an agent to succeed on first attempt?

Given a single parameter, full schema coverage, and annotations, the description fully covers what the tool does, how to use it, and what it returns. No gaps.

Complex tools with many parameters or behaviors need more documentation. Simple tools need less. This dimension scales expectations accordingly.

Parameters3/5

Does the description clarify parameter syntax, constraints, interactions, or defaults beyond what the schema provides?

With 100% schema description coverage, the baseline is 3. The description restates the first cash flow being negative, adding minimal extra meaning beyond the schema.

Input schemas describe structure but not intent. Descriptions should explain non-obvious parameter relationships and valid value ranges.

Purpose5/5

Does the description clearly state what the tool does and how it differs from similar tools?

The description clearly states it computes internal rate of return via Newton-Raphson and provides guidance on typical cash flow structure. It effectively distinguishes from sibling TVM tools like tvm_npv and tvm_future-value.

Agents choose between tools based on descriptions. A clear purpose with a specific verb and resource helps agents select the right tool.

Usage Guidelines4/5

Does the description explain when to use this tool, when not to, or what alternatives exist?

The description explicitly states when to use the tool ('when computing the internal rate of return for a cash flow series') and provides input format. It does not explicitly exclude scenarios but is sufficiently clear.

Agents often have multiple tools that could apply. Explicit usage guidance like "use X instead of Y when Z" prevents misuse.

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