Pooled Internal Rate Of Return - PIRR

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DEFINITION of 'Pooled Internal Rate Of Return - PIRR'

A method of calculating the overall internal rate of return (IRR) of a portfolio of several projects by combining their individual cashflows. The overall IRR of the portfolio is then calculated from this pooled cash flow.

BREAKING DOWN 'Pooled Internal Rate Of Return - PIRR'

The pooled IRR concept can be applied, for example, in the case of a private equity group that has several funds. The pooled IRR can establish the overall IRR for the private equity group, and is better suited for this purpose than say average IRR of the funds, which may not give an accurate picture of overall performance.

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RELATED FAQS
  1. What are the disadvantages of using net present value as an investment criterion?

    While net present value (NPV) calculations are useful when you are valuing investment opportunities, the process is by no ... Read Full Answer >>
  2. What's the difference between net present value and internal rate of return? How ...

    Both of these measurements are primarily used in capital budgeting, the process by which companies determine whether a new ... Read Full Answer >>
  3. Which is a better measure for capital budgeting, IRR or NPV?

    In capital budgeting, there are a number of different approaches that can be used to evaluate any given project, and each ... Read Full Answer >>
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    Dividends paid in cash affect a company's balance sheet by decreasing the company's cash account on the asset side and decreasing ... Read Full Answer >>
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