Term Definition: internal rate of return (IRR) |
Main Description
The rate of return that would make the present value of future cash flow plus the final market value of an investment equal the current market value of the investment. IRR can be used to compare several different investments that an organization is considering. Assuming that all other factors are equal among these investments, the project with the highest IRR would be considered the most desirable and the best to undertake first.
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