What Is financial Internal rate of return?
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The internal rate of return (IRR) is a way to measure the return on an investment. The formal definition can be found here at wikipedia:\nhttp://en.wikipedia.org/wiki/Internal_rate_of_return\n\nIt is simply a method used to compare different investment scenarios. As different alternatives may involve different sums of money paid at different points in time, it may be difficult to objectively compare them. The IRR simply produces a single number for each alternative, and the one with the highest IRR is chosen as the best one.\n\nWhat it basically measures is the amount of interest that a bank account would have to pay in order to attain the same cash payments.\n\nSome simple examples:\n\nFor instance, if you were to pay $100, and then receive $110 back 1 year later, the IRR is 10%.\n\nIf you were to pay $100, then receive $10 back one year later, and then $110 one year after that (two years after the beginning), then the IRR is still 10%.\n\nIn general, the IRR is difficult to solve, and must use iterative numerical methods for its solution.\n\nThere are also known problems with IRR that make its usefulness somewhat limited.\n\nLet's just say that you had a situation where you received $110 dollars now, and only had to pay $100 one year from now. If you work through the numbers, you would find the IRR to be -10% (note the MINUS).\n\nIf instead you received $100 now and had to pay back $100 one year from now, the IRR would be 0%.\n\nNow we can see the problem - clearly the first alternative is favourable, you receive more money UP FRONT than you even need to pay in. Unfortunately, IRR messes up in these kinds of cases and gives you a misleading result.
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The annual return would be (1 + MonthlyRate)^12 - 1 (where ^12 means to the 12th power).  Componding monthly.\n\nSo, if you had a 1.0% monthly return, that would be 12.683% annual return.
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The internal rate of return (IRR) is defined as the discount rate that gives a net present value (NPV) of zero.
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No, it is not.  For instance, the current savings bond rate is 3.20%.  Last year, the inflation rate was 3.42% so your real rate of return on the savings bond is -0.20%.  Factor in a nominal federal tax rate of 15% and your real rate of return is -0.67%.
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Return on Capital a/k/a ROC
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The rate is the interest rate before compounding.  The yield is what you actually get, which is always a little higher than the rate, because you start earning interest on your interest as time goes by.
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The main choice is Discounted Cash Flow versus Internal Rate of Return.\n\nSome authors have a preference for one versus the other.\n\nUnder normal circumstances they produce the same answer; however, under unusual circumstances they produce different answers.  IRR requires that you be able to solve n-th degree polynomials, which can often be approximated with software like EXCEL.  IRR also produces multiple solutions, some of which need to be discarded as unrealistic.
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Internal Rate of Return takes into account the time value of money, and therefore, goes some way to address the opportunity cost of the investment.\n\nIRR is generally used when ROI is the main indicator of the board (no, it is not a definitive causal link). \n\nIRR is not inherently superior to other discounted cash flow techniques, it is however, one that cna simply be explained to a board of directors.\n\nThat aside, a Financial Accountant may well use IRR to evaluate projects in combination with some sensitivity analysis of the WACC (Weighted Average Cost of Capital) as variations in WACC can take a borderline project/investment and turn it into a losing one.
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IRR=PV/(1+K)^n=0\n\nPV=Present Value of the Investment\nK=Rate of interest in\nn=number of years
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growth g= rb+(r-ki)(1-tc)bxB/S where r is roi, b is retention rate, ki cost of debt, tc is corporate tax rate, B/S is the capital sturcture. This shows that when r grows the growth also will grow.
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IRR refers to the Internal Rate of Return. This is used to calculate the profitablility of a venture in both the short and long term. \n\nNPV or Net Present Value is the current value of an investment made some time ago. It takes into account the principal and the return so far.
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Go to Yahoo finance, in the upper right hand of the page click on my portfolio.  Set up a portfolio that tracks transactions.  Enter in the correct information and it will give you a rate of return.  \n\nUse this feature only if you want to track your personal finance.  If you are doing research on historical rates of return on particular stocks it would be better to use the following web site.\n\nRate of return is calculated by this formula in microsoft exel.  =((B1/A1)-1)  where A1 is the starting price and B1 is the ending price
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Return on assets will be 1.7 * 15% = 25.5%\n\n---\n\nRearranging the forumlas:\n\nNet income = Profit margin (15%) * Sales\n\nTotal assets = Sales/Total Asset Turnover(1.7)\n\nso...\nReturn on assets = Net income / Total assets\n                 = (15% * Sales) / (Sales/1.7)\n                 = 15% * 1.7
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Between 10-20%.  10% gets you out of risk insurance, but if you can manage 20%, it can get you into the better interest rate.
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To compare investments one often uses the Sharpe ratio:\n\nS= annual expected return/(risk - risk free rate) \nwhere:\nrisk = standard deviation of the annual returns\nrisk free rate = the rate of a gouvernment bond corresponding to the period over which you want to invest your money, say 4.5%
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Answer - $104.89\n\nReason:\nHere the rate of return is 9 % = .09 and our cash flow is a constant C = 9.44. Plug those into the PRESENT VALUE INTEREST FACTOR FOR ANNUITIES equation, which is:\n\nPV = C * (1-((1/(1+R))^n))/R\n\nHere n = infinity, since the security has no maturity, and will pay out as long as its in business. So\n\nPV = 9.44 * (1-(1/(1.09))^(inf.))/.09\n\nNotice 1/1.09 ~ .9174311, which is less than one. Multiplying a number less than 1 by itself an infinite amount of times will result in an infinately small number, extermely close to zero. So\n\nPV = 9.44 * (1-0)/.09\n\nPV = 9.44/.09\n\nPV = 104.888888 ~ 104.89\n\nNOTE: If you paid more for this security, your implied rate of return would be less than 9 %. Conversely, if you paid less for this security, your implied rate of return would be more than 9 %.\n\nI hope this cleared things up.\n\nRunner
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B is the answer.  If they pay before interest kicks in, no cost other than the goods themselves are involved. "0" percent APR.