Business management - Making financial decisions - Internal Rate of Return

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  • Created by: jkav
  • Created on: 27-12-16 12:28

Internal Rate of Return

Definition: IRR is the discount rate that gives a project a zero NPV.

Method

  • Use the earlier NPV worked out or given in question
  • Work out the NPV of the project at 20%
  • Aim for a negative NPV
  • Add the original NPV with the new 20% NPV…

Comments

FRANCIS WANYAMA

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Hi thanks for the good notes. May I request for a worked example to enhance more understanding