The ondeck capital and similar companies have an internal rate of return which is best described as a rate of discount that helps in calculating the excepted return by an investor from a particular project. This mainly takes place when in a project the NPV is zero or there is a break even. One need to select the project which has a high internal rate of return than financing and this makes the complete decision very simple. The project becomes more and more beneficial and attractive with the growing difference between the internal rate of return and cost of financing.
There is a difference in the rule of internal rate of return for independent and projects which are mutually exclusive. Things can get tricky in case of the latter type of projects. There are cases where the internal rate of return is lower than the NPV of one project than the other. This can happen in between projects that are mutually exclusive. The initial investment in these types of projects is not same. Though the internal rate of return causes some issues still a huge number of companies use this in their business. A person starting a business must know percentage in a business is far important than numbers. This is because percentages cause greater impact while calculating success in investment. Ondeck financing Canada has budgeting tools for capital that are highly effective, unlike every other business tactic that are often not perfect. But firms like ondeck Canada, that has introduced an internal rate of return has seen great effects as it is itself an effective concept in the process of investment making. In case of NPV, the process includes the rule that in case the NPV is positive it is accepted and when the situation is vice-versa it is rejected. This is in case of independent projects however in case of projects that are mutually exclusive the one with the highest NPV is accepted.