IRR Return Clause Samples
The IRR Return clause defines the internal rate of return (IRR) that an investor or party is entitled to receive from an investment or financial arrangement. Typically, this clause outlines the method for calculating the IRR, the time period over which returns are measured, and any specific thresholds or targets that must be met before distributions are made. For example, it may specify that investors receive distributions until a certain IRR is achieved before profits are shared with other parties. The core function of this clause is to ensure that investors receive a predetermined rate of return on their investment, thereby aligning expectations and providing a clear mechanism for profit allocation.
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IRR Return. The IRR Return described in Section 5.01 below shall be determined based upon internal rate of return of KBS. As used in this Agreement, the term "IRR Return" means the annual discount rate that when compounded monthly results in a net present value equal to zero when the discount rate is applied to all capital contributions by KBS and all distributions made by the Company to KBS pursuant to this Agreement. The IRR Return shall be calculated using the XIRR function provided in Microsoft Office Excel or any replacement software issued by Microsoft to compute internal rate of return. It is understood by the Members that the achievement of a particular IRR Return requires both a return of all capital contributions plus a cumulative return on such capital contributions at the applicable percentage IRR Return.
IRR Return. The IRR Return described in Section 5.01 shall be determined based upon internal rate of return of KBS and JV Member. As used in this Agreement, the term “IRR Return” means for each of KBS and JV Member the effective annual discount rate that results in a net present value equal to zero when the discount rate is applied to all capital contributions by each such Member and all distributions made by the Company to each such Member pursuant to this Agreement based on the actual date of capital contributions and distributions. The IRR Return shall be calculated using the XIRR function provided in Microsoft Office Excel to compute internal rate of return. It is understood by the Members that the achievement of a particular IRR Return requires both a return of all capital contributions plus a cumulative return on such capital contributions at the applicable percentage IRR Return.