What IRR of project tell us? for example; IRR = 20%?
Answers:
IRR stands for Internal Rate of Return. This is used surrounded by Capital Budgeting for companies that want to build an investment and are trying to desire if it is worth it or not. The IRR is the "influential relinquish of the investment".
For example - if a company is decide on investing in a project, they will multiply the IRR. this is done by a formula (you can check out on wikipedia.org, or check some financial websites).
The rate that have be calculated (say for example 20%) will be compared beside the rates of other securities (such as stocks, bonds, mutual funds, etc.). If the IRR is complex than the rate the protection is estimated to earn, than the project should be invested in.
Also, you use the IRR to compare different projects. If you enjoy 4 projects (project A, B, C)
and A = 10%, B = 20%, and C = 30%, later you would choose the project next to the most advantage (project C).
but beware, their are various other factor that could contribute to a choosing an investment bar basically the IRR.