Equity IRR (Internal Rate of Return)

The IRR is the interest rate (also known as the discount rate) that will bring a series of cash flows (positive and negative) to a net present value (NPV) of zero (or to the current value of cash invested). Using IRR to obtain net present value is known as the discounted cash flow method of financial analysis. IRR can be used as a comparable metric for the analysis of similar property transactions having comparable income patterns.