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Internal Rate of Return (IRR) is discount rate equating investment cost to present value of future cash flows; alternative to NPV.

الصيغة

Solve for discount rate where NPV = 0
NPV
0 — 0

دليل خطوة بخطوة

  1. 1Input initial investment and projected cash flows
  2. 2Solve for discount rate where NPV = 0
  3. 3Compare IRR to required return

أمثلة محلولة

الإدخال
Invest $100k, receive $30k/year for 5 years
النتيجة
IRR ≈ 4.3% (modest return)
Accept if > required return

أخطاء شائعة يجب تجنبها

  • Multiple IRRs (non-standard cash flows)
  • Assuming reinvestment at IRR rate

أسئلة شائعة

IRR vs. NPV?

NPV better for comparing mutually exclusive projects; IRR useful for single projects.

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الإعدادات