IRR
Finance
IRR (Internal Rate of Return)
Internal Rate of Return
Discount rate at which an investment's net present value equals zero.
Examples
- 01The new robot welding cell has an IRR of 24 %, well above the company's minimum of 12 %, based on labour and scrap savings over 7 years.
- 02The investment committee ranks all CAPEX requests by IRR, but also checks how sensitive each IRR is to lower volumes.
- 03One year after start-up, the controller recalculates the IRR with actual savings and finds 19 %, still above the hurdle rate.