The internal rate of return is simply the rate of return on an investment that equates the investment outlay with the present value of cash inflow received after one period. This also implied that the rate of return is the discount rate which makes net present value equal to zero.Internal rates of return are commonly used to evaluate the desirability of investments or projects.The higher a project's internal rate of return, the more desirable it is to undertake the project. Assumingall other factors are equal among the various projects, the project with the highest IRR would probably be considered the best and undertaken first. If the IRR is greater than or equal to the required rate of return, the project should be accepted but if its IRR is less than the required rate of return, the project should be rejected