The internal rate of return (IRR) or economic rate of return (ERR) is a rate of return used in capital budgeting to measure and compare the profitability of investments. It is also called the discounted cash flow rate of return (DCFROR) or the rate of return (ROR). In the context of savings and loans the IRR is also called the effective interest rate. The term internal refers to the fact that its calculation does not incorporate environmental factors (e.g., the interest rate or inflation).
Read more about Internal Rate Of Return: Definition, Uses, Calculation, Problems With Using Internal Rate of Return, Mathematics
Famous quotes containing the words internal, rate and/or return:
“One’s stomach is one’s internal environment.”
—Samuel Butler (1835–1902)
“This is the essential distinction—even opposition—between the painting and the film: the painting is composed subjectively, the film objectively. However highly we rate the function of the scenario writer—in actual practice it is rated very low—we must recognize that the film is not transposed directly and freely from the mind by means of a docile medium like paint, but must be cut piece-meal out of the lumbering material of the actual visible world.”
—Sir Herbert Read (1893–1968)
“It is the secret of the world that all things subsist and do not die, but only retire from sight and afterwards return again.”
—Ralph Waldo Emerson (1803–1882)