Definition: A measure of an investment’s expected annual compound growth rate, accounting for the time value of money. IRR calculates the discount rate where the Net Present Value (NPV) of all cash flows equals zero. Higher IRR indicates a more attractive investment.
Example: A project that costs $100,000 and yields $35,000 annually for three years has an IRR of approximately 17%, making it attractive if the cost of capital is lower.
Explore the IVP NAV Solution
The IVP NAV Solution can take IRR into account for NAV calculations. It enables real-time NAV finalization for multiple funds with complete traceability for specific NAV components. It centralizes NAV oversight in one intuitive experience with automated exception identification and trend analysis, so asset managers can quickly and easily remediate NAV anomalies at the key component, share class, and security level.
