How to Calculate the Internal Rate of Return | Part 1

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The Internal Rate of Return, or IRR for short, is the discount rate that causes the net present value to equal zero. As a type of capital budgeting tool, the IRR allows managers and business owners the ability to weight a variety of different capital budgeting projects.

The video provides a brief description and purpose of IRR in addition to showing how to calculate the internal rate of return. It is recommended that viewers have an understanding of the time value of money and how to calculate both the present value and NPV prior to learning IRR. The following videos are resources that will detail these topics.

The Time Value of Money: The Time Value of Money | Personal Fi...
How the Calculate the Net Present Value: How to Calculate Net Present Value

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