Internal Rate of Return (IRR)
The internal rate of return is a financial tool for investment analysis and the cost loan evaluation. It represents the discount rate that equates to zero the present value of a discounted cash flow.
For an investment, the investor sees three possibilities for the IRR:
a) IRR greater than the opportunity cost rate - satisfactory project (profitable);
b) IRR equal to the opportunity cost rate- indifferent project (no profit or loss);
c) IRR less than the opportunity cost rate - unsatisfactory project (loss).
The opportunity cost is the interest rate of the best return on an investment alternative.
For more consistent results and meet various cash flow models can be used another version of the internal rate of return called: Modified Internal Rate of Return (MIRR).
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To calculate the internal rates of return enter values in chronological order of events, separated by commas. The first element or disbursement should be written with negative sign. Use the point as decimal separator. Ex. For the number 25,152.47, enter 25152.47; The results are automatically displayed after the click on "Calculate" after a click on "Calculate".
DuPont Analysis Investments - Net Present Value Discounted Cash Flow (DCF) Internal Rate of Return (IRR) Modified Internal Rate of Return (MIRR) Average Interest Rate Average Rate of Return Break-Even Point in Quantities Break-Even Point (BEP) in Sales French Amortization System Constant Amortization System German Amortization System Sinking Fund American Amortization System Canadian Mortgage Amortization Amortization - Average Constant and French Straight Line Depreciation Method Sum of Digits Depreciation Method (SYD) Balance Sheet Analysis Cash Flow Statement by Direct Method Cash Flow Statement by Indirect Method