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Fundamental
Internal Rate of Return (IRR)
Discount rate making NPV = 0 for cash flows
Definition
IRR is the discount rate that makes the net present value of cash flows equal zero. It represents the expected rate of return for an investment. Projects with IRR > cost of capital create value.
Related Topics
#capital budgeting
#expected return
#discount rate
#project evaluation
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Category: Fundamental
Fundamental analysis examines a company's financial health, management quality, and market position to determine intrinsic value.
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