Internal Rate of Return (IRR)

The Internal Rate of Return is a method used to calculate the rate of return on an investment, taking into account the effects of inflation. The IRR is determined by dividing the Net Present Value (NPV) by the initial investment. The Internal Rate of Return is used to compare different real estate investments. It is important to note that the IRR does not take into account the time value of money, and is therefore only suitable for investments with equal cash flows.