Internal Rate of Return (IRR) can also be referred as economic rate of return (ERR). It is a method used to find the rate of return. It is a rate of interest at which the net present value of the cash flow equals zero for an investment. It is mainly used to find the attractiveness of an investment or a project. If IRR of an investment exceeds the actual rate of interest, then a company can hold the new project, else it should be rejected.
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