Could someone explain what is ROI and IRR. Thank you

Example of IRR :-
Your organization has an investment of $100,000 for a project. After one year you will get $110,000 in return.
Present value (PV) of cash outflows for the project = $100,000
Future Value (FV) of cash inflows for the project = $110,000

It’s called future value, because we’ll get the money after one year.

Therefore, PV of cash inflows for the project = $110,000/(1+R), where R is the rate of return or discounted rate.

Using this formula the IRR comes out at 10%



Now for the ROI

ROI = (Gain from Investment – Cost of Investment) / Cost of Investment

E.g: Investor A purchased 50 equity shares of XYZ Ltd for a price of $7 each in 2015. On 31.01.2017 shares are sold for the price of $11 each, making a gain of $5 per share. Thus, the ROI can be calculated as,

ROI= (50*11) – (50*7)/ 50*7=57%