Interpolation method is used to know the exact point or rate of return where NPV(net present value) of investments is zero.
Internal rate of return, net present value, accounting rate of return and payback method.
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internal rate of return
internal rate of return
Internal rate of return (IRR) is a discounted method used for Capital budgeting decisions (investment etc) while accounting rate of retun is a measure for calculating return for a one off payment. IRR is actually the discount rate that equates the Present value of the cash flows to the NPV of the project (investment) while accounting rate of return just gives the actual rate of return. Habib topu1910@gmail.com
Well they both have different properties. You would have to research to find the difference.
Money deposited in an interest bearing account has a rate of return. the institution will take that money and reinvest it so they can make money off of it as well.This rate of return on the internal investment is the internal rate of return, which is usually higher than that paid to the original investor.
Internal Rate of Return
internal rate of return
What is presesent value
Internal Rate of Return is used in capital budgeting. Its primary purpose is to better measure the profitability of investments and to compare this profitability.
A change in the required rate of return will affect a project's Internal Rate of Return (IRR) by potentially shifting the project's feasibility. If the required rate of return increases, the project's IRR needs to be higher to be considered acceptable. Conversely, a decrease in the required rate of return could make the project's IRR more attractive.