internal rate of return financial definition of internal rate of return. internal rate of return finance term by the Free Online Dictionary.

Internal rate of return (IRR)

Dollar-weighted rate of return. Discount rate at which net present value (NPV) of an investment is zero. The rate at which a bond's future cash flows, discounted back to today, equal its price.

Internal Rate of Return

The discount rate at which the cash inflow on an investment equals its cash outflow. That is, the internal rate of return is the return necessary for the present value of an investment to equal what one spends in making the investment. Importantly, the internal rate of return accounts for inflation. See also: Yield to maturity.

internal rate of return (IRR)

The rate of discount on an investment that equates the present value of the investment's cash outflows with the present value of the investment's cash inflows. Internal rate of return is analogous to yield to maturity for a bond.

internal rate of return

The annual rate of earnings on an investment equates the value of cash returns with the cash invested,taking into consideration the power of compounding interest.The following formula requires a trial-and-error method for solution. The fallacy with the method is its assumption that all cash flows are reinvested at the internal rate of return.

Using this formula,CF is the cash flow in each period,with one subpart of the formula for each investment year until you reach n,the final year of the investment.You have to solve for R, the annual rate, by trial and error.

Internal Rate of Return (IRR)

What Does Internal Rate of Return Mean?

The discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero. Generally, the higher a project's internal rate of return is, the more desirable it is to undertake. Thus, IRR can be used to rank potential projects. Assuming all factors are equal, the project with the highest IRR probably would be considered the best and would be undertaken first. IRR sometimes is referred to as the economic rate of return (ERR).

Investopedia explains Internal Rate of Return

One can think of IRR as the rate of growth a project is expected to generate. Although the actual result may differ from the estimated IRR rate, a project with a substantially higher IRR value than other available options still will provide a much better chance for strong growth. IRRs also can be compared against prevailing rates of return in the securities market. If a firm cannot find any projects with IRRs greater than the returns that can be generated in the financial markets, it may choose to invest its retained earnings in the market.

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Allocative Efficiency Annuity Method of Depreciation Basic IRR Rule Capital Budget Capital Budgeting Cost of Lease Financing discounted cash flow Dollar-Weighted Rate of Return Incremental Internal Rate of Return Intermarket Sector Spread IRR J Curve J-Curve Modified Internal Rate of Return Multiple Rates of Return payback period Planned Capital Expenditure Program Present Value Interest Factor Risk-Free Rate of Return	Highlights of the Star Diamond Project pre-feasibility study include probable mineral reserves of 171 million tonnes at a weighted average grade of 12 carats per hundred tonnes, total diamond production of 20 million carats over a 12 year total mine life and a pre-tax base case net present value of $474 million for an Internal Rate of Return of 12%, says the company. Shore Gold (SGF) climbs on Star Diamond Project study results by Buzz on the Boards / Stockhouse Of special note are the two new chapters on capital budgeting analysis techniques of net present value (NPV) and internal rate of return (IRR) set out in clear, comprehensive, 'reader friendly' exampled explanations. Financial Statements by Internet Bookwatch This represents a return on capital of 160% and an Internal Rate of Return (IRR) of 98%. unicorn investment bank announces successful sale of orimix concrete ... by Albawaba.com	Intermediario di titoli Intermediario financiero Intermediary Intermediate Bond Intermediate Target Intermediate Targets intermediate theory state Intermediate Trend Intermediate-Term Intermediate-Term Bond Intermediated Market intermediation Intermittency Intermodal Container Transfer Facility Internal Audit Internal Audit and Risk Compliance Service Internal Auditor Internal Balance Internal Expansion Internal Finance Internal Financing Internal Funds Internal Growth Rate Internal Market Internal Measure internal rate of return Internal Revenue Code Internal Revenue Service Internal Revenue Service Restructuring and Reform Act of 1998 Internalization Internalize Internally Efficient Market International Accounting Standards International Accounting Standards Board International Accounting Standards Committee International Accounting Unit International Accreditation Forum International Air Transport Association International Anti-Bribery Act of 1998 International Anticounterfeiting Coalition International Arbitrage International Asset Pricing Model International Association of Financial Engineers International Atomic Energy Agency International Atomic Energy List International Bank for Economic Cooperation International Bank for Reconstruction and Development International Banking Act International Banking Facility International Bond International Bonds	Internal pterygoid muscle Internal Publication internal pudendal artery internal pudendal block internal pudendal block Internal pudendal nerve internal pudendal vein Internal pudendal veins Internal pudendal vessels Internal pudic artery Internal Pulmonary Artery Banding Internal Purchase Order Internal Quality Assessment Scheme Internal Quality Assurance Cell Internal Quality Assurance System Internal Quality Audit Internal Quality Audit Committee Internal Quality Control Internal Quality Control System Internal Quality Management Internal Quality Review Internal quantum efficiency Internal quantum efficiency Internal quantum efficiency Internal Queued Direct Input/Output internal radiation internal radiation internal radiation Internal Radiation Therapy Internal Radiation Therapy internal rate of return Internal Rate of Return on Equity Internal Rates of Return Internal Rates of Return Internal Ratings Based Internal Ratings Based Approach Internal Read Visibility Not E internal reader Internal Real Exchange Rate Internal Recall Recorder Internal Recirculation Zone Internal Reconnection Event internal reconstruction of bone internal reconstruction of bone internal reconstruction of bone Internal Redundant Internal Reference Amino Acid Internal Reference Unit internal reflectance spectroscopy internal reflection Internal Reflection Element Internal Reflection Infrared Imaging Internal refugee Internal refugee Internal Reinforcement of Neural Programs Internal Renewable Water Resources internal repeat internal repeat internal repeat internal repeat Internal Repeat Array

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Allocative Efficiency
Annuity Method of Depreciation
Basic IRR Rule
Capital Budget
Capital Budgeting
Cost of Lease Financing
discounted cash flow
Dollar-Weighted Rate of Return
Incremental Internal Rate of Return
Intermarket Sector Spread
IRR
J Curve
J-Curve
Modified Internal Rate of Return
Multiple Rates of Return
payback period
Planned Capital Expenditure Program
Present Value Interest Factor
Risk-Free Rate of Return

Highlights of the Star Diamond Project pre-feasibility study include probable mineral reserves of 171 million tonnes at a weighted average grade of 12 carats per hundred tonnes, total diamond production of 20 million carats over a 12 year total mine life and a pre-tax base case net present value of $474 million for an Internal Rate of Return of 12%, says the company.

Shore Gold (SGF) climbs on Star Diamond Project study results by Buzz on the Boards / Stockhouse

Of special note are the two new chapters on capital budgeting analysis techniques of net present value (NPV) and internal rate of return (IRR) set out in clear, comprehensive, 'reader friendly' exampled explanations.

Financial Statements by Internet Bookwatch

This represents a return on capital of 160% and an Internal Rate of Return (IRR) of 98%.

unicorn investment bank announces successful sale of orimix concrete ... by Albawaba.com

Intermediario di titoli

Intermediario financiero

intermediate theory state

Intermediate Trend

Intermediate-Term