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I r r

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(Querist)
11 January 2014 What is IRR Describe?
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P V Ram

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P V Ram (Expert)
12 January 2014 Simply stated IRR is the rate at which the Present Value of the stream of Cash inflows equals the Present Value of the stream of cash outflows.
Projects whose IRR is greater than cost of capital are acceptable.

The greater the IRR, the better it is.

Thanks!
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ankush yadav

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ankush yadav (Querist)
14 January 2014 what it is full form, Internal rate of return?

how we calculate it?
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P V Ram

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P V Ram (Expert)
15 January 2014 Your expanded version is correct.

Strictly speaking there is no fixed formula for calculation of IRR. We find a formula suggested by certain authors at some places but it does not hold good in all scenarios.

If it is calculated manually, Hit and Trial method is the right method.

In case you are using a spread sheet, then you can apply the spreadsheet formula for calculation of IRR directly.

Thanks!
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P V Ram

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P V Ram (Expert)
15 January 2014 Your expanded version is correct.

Strictly speaking there is no fixed formula for calculation of IRR. We find a formula suggested by certain authors at some places but it does not hold good in all scenarios.

If it is calculated manually, Hit and Trial method is the right method.

In case you are using a spread sheet, then you can apply the spreadsheet formula for calculation of IRR directly.

Thanks!
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