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The IRR of an investment is the discount rate at which the net present value of the investment's costs (negative cash flows) equals the net present value of the investment's benefits (positive cash flows).

IRR returns a unique value when all negative cash flows occur before all positive cash flows, or when a project's sequence of cash flows contains only one negative cash flow.

A project or investment with a positive IRR is projected to return some value to the business. However, if the project's cash flows flip between positive and negative over its estimated duration, a negative IRR can occur mathematically.

When the total quantity of cash flows generated by an investment is less than the initial investment, the IRR is negative. The investing entity will receive a negative return on its investment in this situation.

IRR returns a unique value when all negative cash flows occur before all positive cash flows, or when a project's sequence of cash flows contains only one negative cash flow.

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