IRR - Internal Rate Of Return | Shark Finesse Financial Terms Glossary

IRR - Internal Rate Of Return

Formal

Companies appraise investments by comparing the benefits against the costs, and discounting these cash flows with reference to time. The IRR is the discount rate (Minimum return (pa%)) that when applied to the cash outflows and inflows delivers a project Net Present Value of zero. This is therefore the actual percentage return per annum on the funds used for the investment.

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Informal

Take all the cash outflows, and all the cash inflows for an investment. What rate of return per annum is derived by accepting the project? Answer = the IRR percentage. A high IRR shows a very profitable project whereas a low IRR delivers lower percentage returns. Comparing this result against the minimum percentage needed for the customer decision makers will be the determining factor in whether to invest/buy or not.

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What we do

At Shark Finesse we have developed an enterprise-grade cloud application to help businesses standardise and simplify their value engagements across the entire customer journey.

Shark, a business value engagement platform used by 1000’s of customer-facing teams globally (e.g. pre-sales, sales, value teams, and customer success) is easy to use, intuitive and usable directly with the customer to negotiate the likely business returns from investing in a solution.

By adopting the Shark approach you will fundamentally transform conversations with new and existing customers, close more business, and differentiate from the competition.

Financial Terms Glossary