internal rate of return

internal rate of return(IRR) An interest rate that gives a net present value of zero when applied to the projected cash flow from an asset, liability, or financial decision. This interest rate, where the present values of the cash inflows and outflows are equal, is the internal rate of return for a project under consideration, and the decision to adopt the project will depend on its size compared with the cost of capital. The approximate IRR can be computed manually by interpolation but most computer spreadsheet programs now include a routine enabling the IRR to be computed quickly and accurately. The IRR technique suffers from the possibility of multiple solution rates in some circumstances. If it suggests a different decision to that obtained from net present value it should be disregarded, because net present value is a superior decision tool.

• decider
• decimal currency
• decision making
• decision-making unit
• decision model
• decision support system
• decision table
• decision tree
• deck cargo
• declaration of dividend
• declaration of solvency
• decline stage
• decreasing term assurance
• deductible
• deduplication
• deed
• deed of arrangement
• deed of assignment
• deed of partnership
• deed of variation
• deed poll
• deep-line strategy
• deeply discounted security
• deep market
• de facto