The internal rate of return (IRR) is a metric used in capital budgeting to estimate the return of potential investments. Here is the formula for calculating it.

The IRR is the discount rate that brings regular cash flows back to a net present value (NPV) of zero, meaning it calculates the rate of return at which an investment or project breaks even.

Quick tip: IRR is best used when comparing investments with similar durations and in tandem with other analyses, such as payback period and net present value (NPV). IRR vs. NPV ...

Reviewed by David Kindness Fact checked by Vikki Velasquez The internal rate of return (IRR) is frequently used by companies to analyze profit centers and decide between capital projects. But this ...

The net present value (NPV) method can be a very good way to analyze the profitability of an investment in a company, ... The internal rate of return (IRR) ...

The actual formula to calculate IRR is rather complex, but fortunately there are several good IRR calculators available online, like this one.. For example, let's say that a company is deciding ...

IRR is a part of the net present value (NPV) equation. A project's IRR is the return rate that makes the net present value of the project equal $0. Image source: Getty Images.

The base case gives us a relatively good IRR of 28% and an impressive net present value ("NPV") of $747M, using a 5% discount rate.

However, it’s important to use the PI alongside other financial metrics, such as net present value (NPV) and internal rate of return (IRR), to gain a comprehensive understanding of a project’s ...

The internal rate of return tells you how much a project or investment needs to make in order to break even, accounting for the cost of capital and the net present value of future cash flows.

Internal rate of return (IRR) and yield to maturity are calculations used by companies to assess investments, but they refer to different things. Here's what each term means, and an example of ...