Internal Rate-of-Return (IRR)
The IRR is a measure of the percentage yield on investment. The IRR is compared against the investor’s minimum acceptable rate of return (MARR)1 to ascertain the economic attractiveness of the investment. If the IRR exceeds the MARR, the investment is economic. If it is less than the MARR, the investment is uneconomic. If the IRR equals the MARR, the investment’s benefits or savings just equal its costs.
KeywordsDiscount Rate Cash Flow Zero Coupon Bond Coupon Bond Initial Outlay
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