Internal Rate of Return? Don't Ask Me to Explain! Most business professionals outside of finance readily admit they do not really understand the meaning or use of internal rate of return (IRR). Nevertheless, many are required, by their CFOs or other financial specialists, to deliver internal rate of return IRR figures to support funding requests, business case results, or proposals for projects, acquisitions, or other actions. It is surprising, however, that many of the same finance people who require IRRs with incoming proposals are themselves unable to explain in practical terms: The meaning of IRR % values. How IRR compares to other financial metrics such as NPV or ROI. For a complete introduction to IRR and MIRR, see the article Internal Rate of Return (IRR). Regarding IRR, almost everyone knows that a larger IRR is better than a smaller IRR. Beyond that, however, the meaning of the IRR percentage is a mystery. Read more of this post Marty Schmidt | 2019-05-18 at 12:05 | URL: https://www.business-case-analysis.com/blog/?p=6934 |