Measuring returns is essential for evaluating the success or failure of an investment program. At first glance, this seems ...

IRR Examples Let us use a couple of examples to show you how simple the IRR concept is. If you invested $100 and at the end of one year you recouped a total of $115 then the IRR would be 15%.

Here’s another perverse IRR example. Year 0, put in $100,000; Year 1, pull out $200,000; Year 2, put in $105,000, followed by another wipeout on a bad stock. You’re down $5,000 net.

Take our NPV/IRR example. We’ve calculated an NPV of $472,169 with an IRR of 57% using a hypothetical outlay, our WACC risk-free rate, and expected after-tax cash flows.

The higher the IRR, the quicker you can expect to see returns. IRR Example. Eugene is trying to decide between investing in a rental property and putting a lump sum into a mutual fund. He calculates ...