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On the meaning of internal rates of return and why an internal rate of return is not an investment criterion

journal contribution
posted on 2023-06-07, 23:43 authored by Mike Osborne
All conceivable solutions to the internal rate of return equation are shown to have meaning as well as use. Internal rates of return are the units in which value is measured and the quantities of such units. This result implies a single internal rate of return cannot be an investment criterion. Moreover, a rate of return should not be considered in isolation; a rate is fully meaningful only when considered alongside its unorthodox partners.


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