Internal rate of return
Internal rate of return
Glossary of business
Definition of internal rate of return
The internal rate of return is the rate of return of an investment project where the net present value is zero. This rate is arrived at by discounting future returns from the investment to give their present value and then seeing which discount rate gives a net present value of the returns of zero. This rate is called the internal rate of return and can then be compared with the current market rate of interest to see how worthwhile the project is.
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Terminology about business
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Definition and meaning of internal rate of return
Meaning of internal rate of return
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