Скачать или смотреть What is Internal Rate of Return - IRR?

Welcome to the Investors Trading Academy talking glossary of financial terms and events.
Our word of the day is “Internal Rate of Return”
The Internal rate of return or IRR is the interest rate at which the net present value of all the cash flows both positive and negative from a project or investment equal zero.
Internal rate of return is used to evaluate the attractiveness of a project or investment. If the IRR of a new project exceeds a company’s required rate of return, that project is desirable. If IRR falls below the required rate of return, the project should be rejected.
IRR allows managers to rank projects by their overall rates of return rather than their net present values, and the investment with the highest IRR is usually preferred. Ease of comparison makes IRR attractive, but there are limits to its usefulness. For example, IRR works only for investments that have an initial cash outflow followed by one or more cash inflows.

By Barry Norman, Investors Trading Academy - ITA