Internal Rate of Return

Now that you have the cash flow projections ready to go for each project, you want to compare the internal rate of return (IRR) of each project to help you decide which project would be most beneficial for your company in terms of yield (rate of return). In this exercise, you will calculate the internal rate of return for each project using np.irr(values).

The cash flows for projects 1 and 2 are available as cf_project1 and cf_project2.

This exercise is part of the course

Introduction to Financial Concepts in Python

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Exercise instructions

Set the internal rate of return for Project 1 equal to irr_project1.
Set the internal rate of return for Project 2 equal to irr_project2.

Hands-on interactive exercise

Have a go at this exercise by completing this sample code.

import numpy as np

# Calculate the internal rate of return for Project 1
irr_project1 = ____
print("Project 1 IRR: " + str(round(100*irr_project1, 2)) + "%")

# Calculate the internal rate of return for Project 2
irr_project2 = ____
print("Project 2 IRR: " + str(round(100*irr_project2, 2)) + "%")

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