Internal rate of return (IRR)

Definition:

Dollar-weighted rate of return. Discount rate at which net present value (NPV) of an investment is zero. The rate at which a bond's future cash flows, discounted back to today, equal its price.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Historical Cost Accounting Convention

An accounting technique that values an asset for balance sheet purposes at the price paid for the asset at the time of its acquisition.

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