Investment Decision-Making: Internal Rate of Return
Interactive

Investment Decision-Making: Internal Rate of Return

Intuition Publishing
Updated Sep 24, 2020

Internal rate of return (IRR) is the discount rate at which the net present value of an investment is zero. Companies add to shareholder value only if they select projects that have an IRR in excess of the company's cost of capital. Here we explore how IRR is calculated and what decision rules are used with IRR.

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