Internal Rate of Return  IRR
Internal Rate of Return (IRR)  the breakeven interest rate.
A primary measure of an investments worth (or value) is based on yield and known as the internal rate of return  IRR.
The internal rate of return can be defined as the breakeven interest rate which equals the Net Present Worth  NPW  (Net Present Value) of a project in and out cash flows.
P(i_{rr}) = F_{cash_in}  F_{cash_out}
= 0 (1)
where
i_{rr} = internal rate of return
F_{cash_in} = future cash flow in (discounted)
F_{cash_out} = future cash flow out (discounted)
(1) can be expressed as
P(i_{rr}) = F_{0 }/ (1 + i_{rr})^{0 }+ F_{1 }/ (1 + i_{rr})^{1 }+ F_{2} /(1 + i_{rr})^{2 }+ .... + F_{n} /(1 + i_{rr})^{n}
= 0 (2)
where
F_{0..n} = cash flow in period 0 to n (positive value for cash flow in  negative value for cash flow out)
For a given cash flow equation (2) can be solved by iteration.
Cash Flow Internal Rate of Return Calculator
 money out  negative values
 money in  positive values
Download and print Present Value of Future Payment chart
Minimum Attractive Rate of Return  MARR
Minimum Attractive Rate of Return  MARR  represents the required or minimum acceptable Internal Rate of Return for a project investment.
Related Topics

Economics
Engineering economics  cash flow diagrams, present value, discount rates, internal rates of return  IRR, income taxes, inflation.
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