# Investment Rate Of Return

by Stewart
(United Arab Emirates)

Is it possible to calculate the IRR on a bank loan facility ?

It would not make much sense to attempt an IRR on a bank loan facility or line of credit. The problem is that you need an investment to balance the positive cash flow against. However, you can perform an investment rate of return analysis on the projects that you finance with the bank's money. If your IRR result is greater than the cost of money(interest rate on the borrowed money) then you can say that it is a great deal. The IRR should be used as the yardstick to compare possible projects.

Dee Reavis

## IRR

by Anonymous

Do loan terms affect IRRs?

 Apr 28, 2010 IRR Analysis by: Dee Reavis The are always at least 2 scenarios when you have a project. You have the money or you don't. If you have the money, you have to take into account the opportunity cost of that money. If you have to borrow the money for the project, then you must take into account the interest charged by the loaner in your Internal Rate of Return Calculation go. These costs are usually taken into account in your hurdle rate or discount rate. Your hurdle rate will likely be higher if you must borrow your project money. For more information go to hurdle rate

## Formula of IRR

by Janet Grace Shing
(Lapu-Lapu City, Philippines)

What is the formula of internal rate of return with examples? ....PLS REPLY IMMEDIATELY.......THANKS

### Comments for Formula of IRR

 Dec 16, 2009 Calculation of IRR by: Anonymous My total Project investment is \$10,000 Total Revenue earning is \$5000Total expenditure is US\$3000Total net profit is US\$2000Now what is my IRR or ROI

 Nov 21, 2009 Formula For Internal Rate Of Return by: Dee Reavis The formula for IRR is this:IRR=Discount Rate When NPV=0The IRR is the discount rate of the NPV when the NPV is equal to 0.

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