Intro to Engineering
The internal rate of return (IRR) is a financial metric used to evaluate the profitability of potential investments by calculating the discount rate at which the net present value (NPV) of all cash flows from an investment equals zero. This means it reflects the expected annualized rate of return that makes the project break even in terms of NPV. A higher IRR indicates a more attractive investment opportunity, as it shows greater potential for returns compared to other investment options.
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