The annualized return that accounts for the size and timing of every cash flow.
IRR answers what ROI cannot: money now is worth more than money later. It is the standard for comparing deals with different timelines — and it rewards getting capital back early.
Example: Invest $100,000, receive $8,000/yr for 5 years plus $140,000 at sale ≈ 13.6% IRR.
FAQ
What is IRR in simple terms?
IRR answers what ROI cannot: money now is worth more than money later. It is the standard for comparing deals with different timelines — and it rewards getting capital back early.