Factor In the Value of Time with Internal Rate of Return
Dear Reader: Time has value. And as such, a part of the analysis as to what the quality of an LED lighting system investment would…
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Internal Rate of Return
The Internal Rate of Return (IRR) is the discount rate that makes the net present value (NPV) of a project zero. In other words, it is the expected compound annual rate of return that will be earned on a project or investment. In the example below, an initial investment of $50 has a 22% IRR. That is equal to earning a 22% compound annual growth rate.
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Net Present Value
Net Present Value (NPV) is the value of all future cash flows (positive and negative) over the entire life of an investment discounted to the present. NPV…
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