Abstract
The internal rate of return of an investment project is that discount rate or rate of interest Y which makes the stream of net returns x t associated with the project equal to a present value of zero. It is the solution for i in the following equation in which indicates the physical lifetime of the investment project.
This chapter was originally published in The New Palgrave Dictionary of Economics, 2nd edition, 2008. Edited by Steven N. Durlauf and Lawrence E. Blume
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Hagemann, H. (2008). Internal Rate of Return. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_798-2
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DOI: https://doi.org/10.1057/978-1-349-95121-5_798-2
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Chapter history
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Latest
Internal Rate of Return- Published:
- 21 March 2017
DOI: https://doi.org/10.1057/978-1-349-95121-5_798-2
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Original
Internal Rate of Return- Published:
- 24 November 2016
DOI: https://doi.org/10.1057/978-1-349-95121-5_798-1