IRR calculations Annual vs Quarterly

Hello friend! Please take a look to see if you could help.

I have an annual cash flow forecast as follows:

Total 67,247,657
2011 (16,897,525)
2012 1,785,783
2013 2,246,005
2014 2,639,227
2015 1,971,116
2016 2,955,283
2017 3,159,493
2018 2,806,202
2019 3,476,776
2020 3,646,009
2021 3,822,240
2022 3,157,590
2023 4,191,510
2024 48,287,946

The IRR calculated based on these cash flows is $19.22%. Then I broke these annual cash flows into quarterly cash flows by dividing each annual cash flow by 4 assuming cash inflows and outflows occur at the end of each quarter, and used the XIRR function to calculate the IRR based on the quarterly cash flows. The annualized quarterly IRR (18.93%) is surprisingly lower than the IRR based on the annual cash flows.

I thought the IRR calculated based on the quarterly cash flows should be higher than that calculated based on the annual cash flows because the quarterly cash flows are in and out throughout the year, rather than at the end of the year.

Can anyone please kindly help? The only reason I could think of is that the time value of money makes the cash outflow upfront matters most. In the annual cash flow schedule, the cash outflow occurs at the end of the year, while in the quarterly cash flow schedule, the cash outflow occur throughout the year. Also, the amount of the upfront cash outflow is significant.

Thanks in advance.

Megan

Megan, please read the forum rules and in the future post your question in the appropriate forum. I have moved it from the Workshop forum, where it has no place, to the Worksheet Function forum.

Thank you.