IRR Internal Rate of Return

Finally Understand How to Calculate and Use IRR

Financial IQ is critical to becoming successful and getting rich.

IRR is a calculation and a decision rule for project finance and investment.

Let’s explore using the internal rate of return as a capital budgeting tool for deciding how to best to invest and allocate money.

Internal Rate of Return, IRR, is similar to, and derivative from, NPV. It restates NPV as a percentage rate. It is a measure with intuitive appeal. It provides a way of grasping the rate of return a project, or income-producing asset, is yielding.

Internal rate of return (IRR) is the discount rate used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero.

The higher the internal rate of return of a proposed project, the more desirable it is to undertake the project.

The internal rate of return is derivative of NPV. NPV basically tells us whether or not the present value of the…