Comments on: Financial Valuation Concepts – The Internal Rate of Return (IRR) http://www.financialmodelingguide.com/valuation-concepts/financial-valuation-concepts-the-internal-rate-of-return-irr/ Free online resource for financial modeling advice, tips and tricks Wed, 04 May 2011 07:24:19 +0000 hourly 1 http://wordpress.org/?v=3.1.2 By: Zanele http://www.financialmodelingguide.com/valuation-concepts/financial-valuation-concepts-the-internal-rate-of-return-irr/comment-page-1/#comment-25203 Zanele Wed, 23 Mar 2011 15:10:47 +0000 http://www.financialmodelingguide.com/features/financial-valuation-concepts-the-internal-rate-of-return-irr/#comment-25203 what is the formular for modified internal rate of return what is the formular for modified internal rate of return

]]> By: Zanele http://www.financialmodelingguide.com/valuation-concepts/financial-valuation-concepts-the-internal-rate-of-return-irr/comment-page-1/#comment-25201 Zanele Wed, 23 Mar 2011 15:07:35 +0000 http://www.financialmodelingguide.com/features/financial-valuation-concepts-the-internal-rate-of-return-irr/#comment-25201 I need to know the IRR of thefollowing and shwing in steps how is it calculated year cash flow 0 -7000 1 8000 2 2000 3 4000 4 12000 5 -20000 I need to know the IRR of thefollowing and shwing in steps how is it calculated

year cash flow
0 -7000
1 8000
2 2000
3 4000
4 12000
5 -20000

]]> By: Corporate Bridge Academy » Net Present Value – An Overview http://www.financialmodelingguide.com/valuation-concepts/financial-valuation-concepts-the-internal-rate-of-return-irr/comment-page-1/#comment-20150 Corporate Bridge Academy » Net Present Value – An Overview Thu, 09 Dec 2010 06:25:56 +0000 http://www.financialmodelingguide.com/features/financial-valuation-concepts-the-internal-rate-of-return-irr/#comment-20150 [...] When the project NPV is zero, the rate at that point of time is considered to be its Internal Rate of Return (IRR). [...] [...] When the project NPV is zero, the rate at that point of time is considered to be its Internal Rate of Return (IRR). [...]

]]> By: Rahul http://www.financialmodelingguide.com/valuation-concepts/financial-valuation-concepts-the-internal-rate-of-return-irr/comment-page-1/#comment-19764 Rahul Sun, 28 Nov 2010 12:12:35 +0000 http://www.financialmodelingguide.com/features/financial-valuation-concepts-the-internal-rate-of-return-irr/#comment-19764 This article may help NPV vs IRR vs MIRR - Pitfalls in the real world www.finaticsonline.com/blog Mr. Manoj Kumar (Director - Global Research!!) What you are asking for is also called CAGR. (i.e. Compounded Annual growth Rate)! In your example it will be calculated as (284/100)^(1/5)-1 if invested at the beginning of the year, or (284/100)^(1/4)-1 if invested at the end of the year. Not many know that CAGR and IRR are exactly same (when calculated correctly, irrespective of negative/positive cash flows)! The difference is that while calcualting CAGR most hunt for two discrete cash flows. Whereas while calculating IRR you may have multiple inflows and outflows! However, IRR (i.e. CAGR) assumes the same re-investment rate as the IRR itself! The article above, does not focus on the calculation, but covers popular misconceptions and pitfalls involved with each of the approaches. -- Rahul This article may help

NPV vs IRR vs MIRR – Pitfalls in the real world
http://www.finaticsonline.com/blog

Mr. Manoj Kumar (Director – Global Research!!)
What you are asking for is also called CAGR.
(i.e. Compounded Annual growth Rate)!
In your example it will be calculated as (284/100)^(1/5)-1 if invested at the beginning of the year,
or (284/100)^(1/4)-1 if invested at the end of the year.

Not many know that CAGR and IRR are exactly same (when calculated correctly, irrespective of negative/positive cash flows)!
The difference is that while calcualting CAGR most hunt for two discrete cash flows. Whereas while calculating IRR you may have multiple inflows and outflows!

However, IRR (i.e. CAGR) assumes the same re-investment rate as the IRR itself!

The article above, does not focus on the calculation, but covers popular misconceptions and pitfalls involved with each of the approaches.

–
Rahul

]]> By: v goel http://www.financialmodelingguide.com/valuation-concepts/financial-valuation-concepts-the-internal-rate-of-return-irr/comment-page-1/#comment-13989 v goel Sat, 19 Jun 2010 06:04:43 +0000 http://www.financialmodelingguide.com/features/financial-valuation-concepts-the-internal-rate-of-return-irr/#comment-13989 how to calculate IRR in a commercial venture of a luxury hotel. further how to take the terminal value in case Investor calculates the IRR based on the period upto which the money lend is repaid back i.e. if money is invested for a period of 7 years. Investor will calculate IRR on the basis of 7 years receipt. But the project still have terminal value. How to take that and calculate in such a scenario? Kindly deliberate. how to calculate IRR in a commercial venture of a luxury hotel. further how to take the terminal value in case Investor calculates the IRR based on the period upto which the money lend is repaid back i.e. if money is invested for a period of 7 years. Investor will calculate IRR on the basis of 7 years receipt. But the project still have terminal value. How to take that and calculate in such a scenario? Kindly deliberate.

]]> By: KEMI http://www.financialmodelingguide.com/valuation-concepts/financial-valuation-concepts-the-internal-rate-of-return-irr/comment-page-1/#comment-10445 KEMI Thu, 08 Apr 2010 15:14:05 +0000 http://www.financialmodelingguide.com/features/financial-valuation-concepts-the-internal-rate-of-return-irr/#comment-10445 question: what is the exit point for any given business? question: what is the exit point for any given business?

]]> By: esther racheal http://www.financialmodelingguide.com/valuation-concepts/financial-valuation-concepts-the-internal-rate-of-return-irr/comment-page-1/#comment-9017 esther racheal Sun, 21 Feb 2010 08:04:03 +0000 http://www.financialmodelingguide.com/features/financial-valuation-concepts-the-internal-rate-of-return-irr/#comment-9017 really helpfull.i have a problem with getting the real rate of return of a loan."a bank disburses a loan as follows;9million today,3 million and 2million at the end of year 2 and 4 respectively.the loan was paid in in 6 annual instalments of 2 million at the beginning of year 6.subsequent installments increase by 2 million each from the previous one.given a rate of inflation of 4.5% per annum during the period.what is the annual real rate of retun for this loan? really helpfull.i have a problem with getting the real rate of return of a loan.”a bank disburses a loan as follows;9million today,3 million and 2million at the end of year 2 and 4 respectively.the loan was paid in in 6 annual instalments of 2 million at the beginning of year 6.subsequent installments increase by 2 million each from the previous one.given a rate of inflation of 4.5% per annum during the period.what is the annual real rate of retun for this loan?

]]> By: Hari http://www.financialmodelingguide.com/valuation-concepts/financial-valuation-concepts-the-internal-rate-of-return-irr/comment-page-1/#comment-8511 Hari Sun, 31 Jan 2010 07:38:21 +0000 http://www.financialmodelingguide.com/features/financial-valuation-concepts-the-internal-rate-of-return-irr/#comment-8511 any one know about the detail of IRR calculation and NPV please advice.Thanks any one know about the detail of IRR calculation and NPV please advice.Thanks

]]> By: MVL http://www.financialmodelingguide.com/valuation-concepts/financial-valuation-concepts-the-internal-rate-of-return-irr/comment-page-1/#comment-7856 MVL Sat, 09 Jan 2010 12:20:24 +0000 http://www.financialmodelingguide.com/features/financial-valuation-concepts-the-internal-rate-of-return-irr/#comment-7856 any one know about the detail of IRR calculation? please advice.Thanks any one know about the detail of IRR calculation? please advice.Thanks

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