What is 'Internal Rate of Return - IRR'?

Internal Rate of Return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌

| Term of the Day Internal Rate of Return - IRR Internal rate of return (IRR) is a metric used in capital budgeting to estimate the profitability of potential investments. Internal rate of return is a discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. Breaking it Down: You can think of internal rate of return as the rate of growth a project is expected to... Read More » Related to "Internal Rate of Return - IRR" Calculating IRR with Excel Find out how to calculate the internal rate of return on investments using Microsoft Excel, as illustrated in different investment scenarios. Read More » How do hurdle rate MARR and internal rate of return IRR relate? In capital budgeting, projects are evaluated by comparing the internal rate of return (IRR) to the hurdle rate, also known as the minimum acceptable rate of return (MARR). Read More » An Introduction To Capital Budgeting We look at three widely used valuation methods and figure out how companies justify spending. Read More » Related Definitions Required Rate Of Return - RRR The required rate of return is the minimum return an investor will accept for an investment or project, that compensates them for a given level of risk. Read More » Conventional Cash Flow Conventional cash flow is a series of inward and outward cash flows over time in which there is only one change in the cash flow direction. Read More » Annuity Method of Depreciation The annuity method of depreciation is a process used to calculate depreciation on an asset by calculating its rate of return as if it was an investment. Read More » Capital Budgeting Capital budgeting is the process in which a business determines and evaluates potential large expenses or investments. Read More » CONNECT WITH INVESTOPEDIA Email sent to: mondemand.forex@blogger.com To update your newsletter preferences or unsubscribe, click here. 114 West 41st St, floor 8 New York NY 10036 © 2019, Investopedia, LLC, All Rights Reserved | Privacy Policy