internal rate of return

(redirected from internal)
Also found in: Dictionary, Thesaurus, Medical, Legal, Acronyms, Encyclopedia, Wikipedia.

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

see DISCOUNTED CASH FLOW.

internal rate of return

see DISCOUNTED CASH FLOW.

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.

References in periodicals archive ?
In this environment organizations need to choose the orientation of their internal audit department--one that partners with management and offers consulting services or one that appeases the SEC by providing governance support.
The measurement system of internal controls should seamlessly integrate with Corporate Performance Management tools, Scorecard systems and other analytical applications.
In logistic regression analysis, family medicine practices were significantly more likely than pediatric practices to offer pelvic examinations (odds ratio, 77.6), contraceptive services (42.1), STD testing (6.9) and confidential services (4.1-8.2); internal medicine practices were more likely than pediatric practices to provide pelvic examinations (13.6), STD testing (21.6) and confidential STD testing (6.9).
Create a set of clear, concise and well-organized procedures that identify and control risks arising from weaknesses in the internal control audit system.
Tatiana Savva, expert at the Independent Analytical Center "Expert-Grup", member of the Board of Public Internal Financial Control, mentioned the urgency and need for supportive decision-makers, including at the highest level, to be able to join and continue to develop in the area of ??internal managerial control and internal audit function.
Archambeault, DeZoort, and Holt also detailed three possible cost considerations related to increased internal audit reporting.
[check] Determine how internal auditors are using technology.
Leading internal audit functions are also reviewing the company's overall risk management processes and working with management to continually improve these processes.
An internal control problem is the existence of a reportable condition over financial reporting.
Summary: RIYADH: Philip Tarling, vice president, IA Centre of Excellence, Huawei, said on Saturday that 90 percent of stakeholders indicated that adherence to the standards increased their confidence in internal audit.
Philadelphia, PA, January 14, 2012 --(PR.com)-- Michael Brozzetti, CIA and President of Boundless LLC, an expert internal auditing and governance firm, is now offering the Institute of Internal Auditors (IIA[R]) Certified Internal Auditor[R] Learning System in onsite and online course formats to help professionals prepare for the CIA[R] exam and master the practice of Internal Auditing.

Full browser ?