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Basic IRR rule |
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Definition of Basic IRR ruleBasic IRR ruleAccept the project if irr is greater than the discount rate; reject the project is lower than the
Related Terms:Administrative pricing rulesIRS rules used to allocate income on export sales to a foreign sales corporation. Basic balanceIn a balance of payments, the basic balance is the net balance of the combination of the current Basic business strategiesKey strategies a firm intends to pursue in carrying out its business plan. Discounted payback period ruleAn investment decision rule in which the cash flows are discounted at an 48-hour ruleThe requirement that all pool information, as specified under the PSA Uniform Practices, in a Irrational call optionThe implied call imbedded in the MBS. Identified as irrational because the call is Irrelevance resultThe Modigliani and Miller theorem that a firm's capital structure is irrelevant to the firm's Multirule systemA technical trading strategy that combines mechanical rules, such as the CRISMA Net present value ruleAn investment is worth making if it has a positive NPV. Projects with negative NPVs Rule 144aSEC rule allowing qualified institutional buyers to buy and trade unregistered securities. Rule 415rule enacted in 1982 that permits firms to file shelf registration statements. Tick-test rulesSEC-imposed restrictions on when a short sale may be executed, intended to prevent investors Variance ruleSpecifies the permitted minimum or maximum quantity of securities that can be delivered to Internal rate of return (IRR)A discounted cash flow technique used for investment appraisal that calculates the effective cost of capital that produces a net present value of zero from a series of future cash flows and an basic earnings per share (EPS)This important ratio equals the net internal rate of return (IRR)The precise discount rate that makes the Basic Earnings Power RatioPercentage of earnings relative to total assets; indication of how Internal Rate of Return (IRR)The discount rate that equates the present value of the net cash internal rate of return (IRR)the expected or actual rate of internal rate of return (IRR)Discount rate at which project NPV = 0. IRRSee internal rate of return. MM dividend-irrelevance propositionTheory that under ideal conditions, the value of the firm is unaffected by dividend policy. MM's proposition I (debt irrelevance proposition)The value of a firm is unaffected by its capital structure. Monetarist RuleProposal that the money supply be increased at a steady rate equal approximately to the real rate of growth of the economy. Contrast with discretionary policy. Policy RuleA formula for determining policy. Contrast with discretionary policy. RuleSee monetarist rule. Rules-versus-Discretion DebateArgument about whether policy authorities should be allowed to undertake discretionary policy action as they see fit or should be replaced by robots programmed to set policy by following specific formulas. See discretionary policy, policy rule. Accounting IrregularitiesIntentional misstatements or omissions of amounts or disclosures in Attribution RulesLegislation under which interest, dividends, or capital gains earned on assets you transfer to your spouse will be treated as your own for tax purposes. Interest or dividends relating to property transferred to children under 18 also will be attributed back to you. The exception to this rule is that capital gains relating to property transferred to children under 18 will not be attributed back to you. Rule of 72This is a very important rule to know. The rule is that the number 72 divided by the rate of return of your investment equals the number of years it takes for your investment to double. Irrevocable BeneficiaryLegal designation that cannot be contested. (See beneficiary)
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