Internal rate of return is a **discount rate **that makes the net present value of all cash flow from a particular project equal to zero

IRR tells us the rate of return given a stream of cash flow.

Use NPV when you can, use IRR when you must. It can be used for start-up/property/investment evaluation.

If we get IRR that is lower than cost of capital (usually interest rate from the market), we will decline the project.

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