A Refresher on Internal Rate of Return

Harvard Business Review

There are a variety of methods you can use to calculate ROI — net present value , payback, breakeven — and internal rate of return , or IRR. For help in deciphering this I talked with Joe Knight, author of HBR TOOLS: Return on Investment and cofounder and owner of the Business Literacy Institute , to learn more about how IRR works and when to use it. The IRR is the rate at which the project breaks even. If the IRR is higher, it’s a worthwhile investment.


Three Headwinds for Facebook's IPO

Harvard Business Review

For every 10 investments, a good firm may have one defining investment, returning hundreds of percent in IRR. Finance Internet StrategyI am not pessimistic about Facebook's future. I have used the social network for eight years and continue to be impressed with Mark Zuckerberg's focus on product and his vision for the internet. When I logged into the site for the first time in the spring of 2004, I was prepared to hate the service.

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