IRR (Internal Rate of Return) is the discount rate where NPV of cash flows equals zero.

Companies rank projects and acquisitions by comparing IRR to cost of capital.

What is a common mistake with IRR?

Throwing around “IRR” without the simple meaning.

Lesson60 seconds

What is IRR?

The yearly return rate that makes a project's cash flows break even.

Step 1 of 9

IRR (Internal Rate of Return) is the discount rate where of cash flows equals zero.

Explanation level

Tap a persona to hear the same idea in a totally different voice.

Try “Like I'm 5™” for a picture-book version - not the grown-up wording above.

Notebook

Your notes

Notes save automatically on this device

Knowledge graph

Done Here Next