The IRR is also commonly used when comparing if it will be more profitable to open a new branch of business within a company or expand the operations of an existing one. While the projected amount of future cash flow is not always accurate due to a variety of factors, the IRR is a great jumping off point when considering any sort of future investment. The IRR can be used for just about any potential investment, including the stock market, equipment, and other capital investments. The download below allows you to work out the internal rate of return of a series of cash flows so that the NPV is discounted to $0. Generally, the easiest way to calculate IRR is using an Excel spreadsheet. The IRR is used to make the net present value (NPV) of cash flows from a project/investment equal to zero. Internal Rate of Return (IRR) is a discount rate that is used to identify potential/future investments that may be profitable.
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