A better way to understand internal rate of return

A better way to understand internal rate of return

By Fouad Bendris

Executives, analysts, and investors often rely on internal-rate-of-return (IRR) calculations as one measure of a project’s yield. Private-equity firms and oil and gas companies, among others, commonly use it as a shorthand benchmark to compare the relative attractiveness of diverse investments. Projects with the highest IRRs are considered the most attractive and are given a higher priority …

Fouad Bendris’s insight:
Investments can have the same internal rate of return for different reasons. A breakdown of this metric in private equity shows why it matters !

Source:: Strategy & Governance

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