Explore BrainMass

Explore BrainMass

    What are the advantages of knowing the internal rate of return of a project or investment? Please explain with example(s).

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    What are the advantages of knowing the internal rate of return of a project or investment? Please explain with example(s).

    © BrainMass Inc. brainmass.com June 3, 2020, 8:22 pm ad1c9bdddf
    https://brainmass.com/business/capital-budgeting/134837

    Solution Preview

    The internal rate of return (IRR) is a capital budgeting method used by firms to decide whether they should make long-term investments. The IRR is the annualized effective compounded return rate which can be earned on the invested capital, i.e. the yield on the investment.

    A project is a good investment proposition if its IRR is greater than the rate of return that could be earned by alternative ...

    Solution Summary

    Discussion includes two references.

    $2.19

    ADVERTISEMENT