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The internal rate of return (IRR) measures the return of a potential investment while excluding external factors. IRR helps investors estimate how profitable an investment is likely to be. All ...
The problem with a simple rate of return is that it gives you no further information. You don’t know how the assets performed while you held them, nor do you know how your contributions and ...
Internal rate of return (IRR) is one of several well-known formulas used to evaluate prospective investments, especially ones that generate cash flows, like in real estate.
However, CAGR calculates the mean annual growth rate of investment for a specific period of time, while XIRR measures return on investments with irregular cash flows on different dates.
Q. I have prepared projections for a proposed project, and I want to calculate the internal rate of return. Instead of using Excel’s IRR function, should I use simple math formulas so others can ...