Internal Rate Of Return

From Investment Wiki

(IRR) is a commonly used measure of investment quality in the market place. It factors the initial investment and estimated future after tax cash flows including sale proceeds after tax. To some, an investment is considered attractive if the IRR exceeds the cost of capital. Two problems exist with IRR. It assumes that after tax cash flows will be reinvested at the same rate as the investment being analyzed (which is often difficult to achieve) and the function can be erroneous when it encounters multiple sign changes and/or abnormally high positive or negative numbers.