IRR calculations rely on the same formula as NPV does. Keep in mind that IRR is not the actual dollar value of the project. It is the annual return that makes the NPV equal to zero. Generally ...

For an initial amount of $12,000 invested over a three-year period with returns of $3,600, $5,400, and $4,800, the expanded IRR formula would look like this: What we don't know in the above ...

designer491/Getty Images The internal rate of return (IRR) is a way to find what discount rate would cause the net present value (NPV) of a project to be $0—in other words, to find the highest ...

IRR calculates a project's average expected return by setting NPV to zero. Excel's XIRR function can compute project IRRs to help select profitable options. IRR overlooks cash flow accuracy and ...