ABSTRACT
The Internal Rate of Return (IRR) project evaluation criterion has for decades been the most popular project evaluation instrument in mining and elsewhere. Unfortunately, this criterion is fundamentally flawed and dysfunctional, both as a project evaluation and as a project ranking tool. Using simple numerical examples, the paper identifies the major reasons for the IRR inadequacy, and explains why the IRR does not represent what it has for decades been believed to reflect. In addition, an approach is presented to an IRR surrogate, the True Rate of Return, which is free from the shortcomings of the undeservedly popular IRR.
