IRR measures the rate needed to break even on an investment. Calculate IRR by setting NPV to zero and solving for the discount rate. Use Excel's IRR function by inputting initial cost and cash inflow.

The basic premise of finance is that money has time value -- a dollar in hand today is worth more than a dollar in the future. The study of finance seeks to make it possible to compare the value of a ...

Cash flow is a measurement of the money moving in and out of a business, and it helps to determine financial health. Many, or all, of the products featured on this page are from our advertising ...

Net present value (NPV) represents the difference between the present value of cash inflows and outflows over a set time period. Knowing how to calculate net present value can be useful when choosing ...

A discounted cash flow, or DCF, analysis measures the value of a business or project, such as a new factory for your small business. This value equals the sum of all of the project's future annual ...

Perhaps the best picture of a company's current finances, discretionary cash flow refers to the portion of revenue a company has left after all mandatory payments, such as wages, are paid, and all ...

What goes into generating a single dollar of revenue, in your business? Can you accurately define your true operating costs? So many times I’ve heard owners say: “I take my material cost and multiply ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...

Calculating the IRR for a project with an initial outlay and single cash flow is very easy to do. It's also very practical for measuring the returns on investments in collectibles, commodities, ...

Calculate the present value of each year's cash flow by dividing by (1 + discount rate)^number of years. Sum all present values to find the total value of projected cash flows, which in this example ...

Calculating the IRR for a project with an initial outlay and single cash flow is very easy to do. It's also very practical for measuring the returns on investments in collectibles, commodities, ...