Definition of Internal Rate of Return (IRR) and its Explanation with Example, Calculation, Interpretation, Advantages and Disadvantages
IRR is a prominent technique for evaluation of big projects and investment proposals widely used by management of the company, banks, financial institution etc for their various purposes. The calculation of an IRR is little tricky. It is advantageous in terms of its simplicity and it has certain disadvantages in the form of limitations under certain special conditions.