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What Is The Internal Rate Of Return Method?

2010/10/4 17:29:00 102

Return Rate Financial Market

inside

Rate of return

Method:


It is a way to evaluate investment plan.

The method is to calculate the discount rate that can make net present value zero. This discount rate is called internal rate of return.

Then by comparing the internal rate of return with

financial market

The expected cost of capital will be used to evaluate the investment plan.

If the former is greater than the latter, the plan is desirable; otherwise, it will not be desirable.

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