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Internal Rate of Return

Estimates the annualized return that makes a project break even.

Interactive inputs coming — use the formula and example below.

Ejemplo resuelto

Compare IRR with your required return to decide.

Cómo usarla

  • Use the formula below with your own figures.

La fórmula

IRR is the rate where NPV equals zero.

Ejemplo resuelto

Compare IRR with your required return to decide.

Preguntas frecuentes

IRR vs NPV?

IRR is a rate; NPV is a value.

Higher IRR better?

Usually, but check the assumptions.

Consejos

  • Know your break-even before scaling spend.
  • Separate margin from markup when pricing.
  • Discount future cash flows to value projects.

Términos clave

Break-even
Where revenue covers costs.
Margin
Profit as a percent of price.
NPV
Discounted value of future cash flows.