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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.

Przykład

Compare IRR with your required return to decide.

Jak używać

  • Use the formula below with your own figures.

Wzór

IRR is the rate where NPV equals zero.

Przykład

Compare IRR with your required return to decide.

Częste pytania

IRR vs NPV?

IRR is a rate; NPV is a value.

Higher IRR better?

Usually, but check the assumptions.

Wskazówki

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

Pojęcia

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