High IRR

by Abdulmutalib Ismail
(Jubail Industrial City , Saudi Arabia)

I have calculated the IRR for a project with an initial cost of 25000USD and early profit of 3 Million USD.
The IRR calculation result is 1689 %.
This is considered to be high and illogical to report.
Is there any limit to IRR %?

Comments for
High IRR

Click here to add your own comments

Nov 19, 2009

How high is the sky?
by: Dee Reavis

It is possible to have an infinite IRR. If you made an investment of $0 and got a return, then your IRR is infinite. Walking down the street and finding a dollar would give you an infinite IRR.

More realistically, you make a finite investment and get a finite return. That return can be high depending on the numbers.

When I was in high school, I bought a used TV for $15. I fixed it up a little bit and then rented it to some college girls for 3 years @ $15/month. The IRR was about 1200%. So yes you can have projects that have extremely high returns.

If your management does not like to see extreme numbers like you calculated, you can just report that you got an IRR of over 100% or whatever number they would be comfortable hearing

Click here to add your own comments

Join in and write your own page! It's easy to do. How?
Simply click here to return to Business Analyst Skills

Search For More Business Analysis Information

Custom Search

Earn Your Income From Home!

High IRR

Comments for High IRR

Search For More Business Analysis Information

© 2006 - 2012 Stellar Force

Comments for
High IRR