Internal Rate of Return

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What it means

The discount rate that makes NPV = 0.

Why it matters

Compare IRR to your hurdle rate (cost of capital) — above it means invest.

How to calculate — with Cawan's Shoes

Solved iteratively. Cawan's factory example above: IRR ≈ 15.2%.

What's at stake if you ignore this

Beware IRR on projects with irregular cash flows — it can mislead.