Internal Rate of Return Method

Home » CMA Glossary Term » Corporate Finance » Internal Rate of Return Method

The Internal Rate of Return Method is a capital budgeting technique used to evaluate the profitability of potential investments. It calculates the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. This method helps in comparing the desirability of different investments, with a higher internal rate of return indicating a more attractive investment opportunity.

CMA Prep Course

CMA Exam Academy is a proven, 16-week per part online coaching program to help you pass the CMA. The Academy’s comprehensive curriculum will help you pass the CMA exam and achieve your dreams of earning 6-figures per year, ascend to the executive ranks and earn the respect from your peers.