IRR is a discount rate, for which NPV is equal to 0. However, since IRR function is not linear, it is possible to calculate more IRRs for one stream of CFs, so called unconventional cash flows.

The modified internal rate of return assumes that positive cash flows are reinvested at the cost of capital and initial outlays are financed at the firm's financing cost.

Internal rate of return (IRR) and net present value (NPV) aren’t always equally effective. Compare NPV vs. IRR to learn which to use for capital budgeting.

It is heartening to note that sophisticated capital budgeting techniques are being used by Pakistani firms, ...

The interest rate that produces a zero-sum NPV is then declared the internal rate of return. To simplify this process, Excel offers three functions for calculating the internal rate of return, each of ...

IRR is a part of the net present value (NPV) equation. A project's IRR is the return rate that makes the net present value of the project equal $0. Image source: Getty Images.

The profitability index (PI) is a valuable tool for investors when evaluating the long-term success of a project. This financial metric, also known as the profit investment ratio, calculates the ...

Modified internal rate of return (MIRR) is used to assess the cost and profitability of a future project for a company. Unlike the standard internal rate of return (IRR), MIRR assumes that positive ...