Internal Rate of Return (IRR)

What is the Internal Rate of Return (IRR)?

Internal Rate of Return or IRR is a financial metric used to discount capital budgeting and to make the net present value of all future cash flows equal to zero. For this reason, it is used alongside a Discounted Cash Flow analysis. IRR is an estimate of the rate of return that an investment is expected to provide. Usually a higher IRR means a more profitable investment.

 

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