A Refresher on Internal Rate of Return
Harvard Business Review
MARCH 17, 2016
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.