Internal Rate of Return (IRR) Method

Internal Rate of Return (IRR) Method is the reduction rates frequently used in capital budgeting that creates the net present value of the entire cash flows from an exacting project equivalent to zero. Usually speaking, the superior a project’s internal rate of return (IRR) Method, and the additional attractive it is to take on the project.

Capital Budgeting Decisions

Learning Objectives: Evaluate the acceptability of an investment project using the net present value method. Evaluate the acceptability of an investment project using the internal rate of return method. Evaluate an investment project that has uncertain cash flows. Rank investment projects in order of