Net Internal Rate of Return (Net IRR)
Definition - What does Net Internal Rate of Return (Net IRR) mean?
Divestopedia explains Net Internal Rate of Return (Net IRR)
Most investments employ a manager to manage funds and generate returns, then pay a specified fee to that manager. There are other operational costs as well. Net IRR is the return after accounting for such fees and costs.
Net IRR is a commonly used measuring tool for analyzing private equity investment projects that need cash investments in several stages, but generate only one single cash outflow at the end of the project (in the form of an IPO, merger or acquisition). If the net present value of the investment is equal to the net present value of benefits, or is greater than the acceptable rate of return, then the project is profitable. In the case of two projects with the same net IRR, the project with a smaller time frame is considered to be the better option.
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