Internal Rate of Return (IRR)

Internal Rate ofReturn or IRRis a financial metric used to discount capital budgeting and tomake the net present valueof all future cash flows equal to zero. For this reason, it is used alongside a Discounted Cash Flow analysis. IRR is an estimate of the rate of return that an investment is expected to provide. Usually a higher IRR means a more profitable investment.

Free Resources

To continue learning and advancing your career, check out these additional helpfulWSOresources:

• Retained Earnings
• Fraud Triangle
• Accounts Receivable Turnover Ratio
• Marginal Cost Formula
• Nash Equilibrium