Remarks on the economic criterion – the internal rate of return. (English) Zbl 1200.91295

Simerská, Carmen

Chleboun, J. (ed.) et al., Programs and algorithms of numerical mathematics 14. Proceedings of the seminar, Dolní Maxov, Czech Republic, June 1–6, 2008. Prague: Academy of Sciences of the Czech Republic, Institute of Mathematics (ISBN 978-80-85823-55-4). 170-176 (2008).

Summary: The internal rate of return (IRR) together with the present value (PV) is used as a popular measure for financial projects. When used appropriately, it can be a valuable aid in project acceptance or selection. The purpose of this article is to survey the facts about this criterion published so far. More, we investigate the cases of multiple or nonexistent IRRs and try to choose the relevant one and explain its economic meaning.
For the entire collection see [Zbl 1194.65013].

MSC:

91G30	Interest rates, asset pricing, etc. (stochastic models)
91-02	Research exposition (monographs, survey articles) pertaining to game theory, economics, and finance