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Mathematics Quote by Mark Jeffery

“IRR is technically calculated by setting the NPV equation to zero and solving for r = IRR.” quote by Mark Jeffery
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““IRR is technically calculated by setting the NPV equation to zero and solving for r = IRR.””

Mark Jeffery

About This Quote

Source Finance Textbook: Investment Analysis, 2020

IRR is found by setting the net present value to zero and solving for the discount rate.

In simple terms: IRR equals the rate that makes NPV zero.

Key Takeaway

Use IRR to assess project profitability.

Themes

finance investment valuation

Mood

analytical practical

Type

educational technical

When to use this quote

  • capital budgeting
  • project appraisal
  • financial modeling
  • risk assessment

Key Concepts

discounted cash flow rate of return

Questions to Reflect On

  • When is IRR misleading?
  • How does cash‑flow timing affect IRR?
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