The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Internal Rate of Return

  • Harald Hagemann
Reference work entry


The internal rate of return of an investment project is that discount rate or rate of interest Y which makes the stream of net returns xt associated with the project equal to a present value of zero. It is the solution for i in the following equation in which indicates the physical lifetime of the investment project.

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Harald Hagemann
    • 1
  1. 1.