internal rate of return

internal rate of return
internal rate of return ( IRR)
A measure of yield that relates the cash flow from each interest payment and the cash flow from the investment's redemption value at maturity to the purchase price of the investment. It is a present value calculation that reflects the time value of each of those cash flows. By calculating the present value of the cash flows, the IRR reflects the reinvestment income that the investor can earn from reinvesting those cash flows, at the same yield as the investment that generated them, during the life of the investment. American Banker Glossary
————
( IRR)
dollar-weighted rate of return. discount rate at which net present value ( NPV) investment is zero. The rate at which a bond's future cash flows, discounted back to today, equal its price. Bloomberg Financial Dictionary
————
The discount rate at which an investment has a zero net present value. Exchange Handbook Glossary

* * *

internal rate of return internal rate of return return2

* * *

   ► See IRR.

* * *

internal rate of return UK US noun [C or U] (ABBREVIATION IRR)
ACCOUNTING, FINANCE the average amount of money earned each year from a particular investment, calculated by comparing how much money it makes each year with the original amount invested: »

Private equity aims to produce an internal rate of return of about 20% a year.

Compare PRESENT VALUE(Cf. ↑present value)

Financial and business terms. 2012.

Игры ⚽ Нужна курсовая?

Look at other dictionaries:

  • internal rate of return — (IRR) A compound rate of interest worked out over the life of a private equity fund reflecting both the investment return and the rate at which the return is produced. The IRR is calculated by way of an iterative mathematical formula which values …   Law dictionary

  • Internal rate of return — The internal rate of return (IRR) is a capital budgeting metric used by firms to decide whether they should make investments. It is an indicator of the efficiency or quality of an investment, as opposed to net present value (NPV), which indicates …   Wikipedia

  • Internal rate of return — Dollar weighted rate of return. Discount rate at which net present value ( NPV) investment is zero. The rate at which a bond s future cash flows, discounted back to today, equals its price. The New York Times Financial Glossary * * * internal… …   Financial and business terms

  • Internal Rate of Return —   A widely used rate of return for performing economic analysis. This method solves for the interest rate that equates the equivalent worth of an alternative s cash receipts or savings to the equivalent worth of cash expenditures, including… …   Energy terms

  • internal rate of return — IRR An interest rate that gives a net present value of zero when applied to a projected cash flow of an asset, liability, or financial decision. This interest rate, where the present values of the cash inflows and outflows are equal, is the… …   Accounting dictionary

  • 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… …   Big dictionary of business and management

  • internal rate of return — vidinė grąžos norma statusas T sritis turto vertinimas apibrėžtis Diskonto norma, kuriai esant investicijų būsimų pinigų srautų dabartinė vertė yra lygi investicijų objekto įsigijimo sąnaudoms. atitikmenys: angl. internal rate of return ryšiai:… …   Lithuanian dictionary (lietuvių žodynas)

  • Internal Rate Of Return - IRR — The discount rate often used in capital budgeting that makes the net present value of all cash flows from a particular project equal to zero. Generally speaking, the higher a project s internal rate of return, the more desirable it is to… …   Investment dictionary

  • internal rate of return — IRR The *rate of return on an investment derived by comparing the *net present value of future, incremental cash flows with the initial investment. Under IIR analysis, the IIR is used as a *hurdle rate, and an investment is normally accepted only …   Auditor's dictionary

  • incremental internal rate of return — internal rate of return ( IRR) on the incremental investment from choosing a larger instead of a smaller project. Bloomberg Financial Dictionary …   Financial and business terms

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”