Question
Asked Jul 16, 2019
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What is the definition of internal rate of return (IRR) (it is efficient to write down the formula)? What are the given information and what is the unknown variable?

 

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Expert Answer

Step 1

The internal rate of return (IRR) is a form of capital budgeting that finds the profits received from investments. This is a discount rate that converts net present value in the specific project to zero in respective cash flows. It plans for expansion and growth.

Step 2

The formula for calculating &n...

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Net cash flow + year 0 Net cash floW Yaar 2 + Net cash flow Year 1 Year n 0 Net cash flow (1+IRR (1+IRR) (1+IRR

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