The internal rate of return (IRR) is one of the mostwidely used capital budgeting techniques. The internal
rate of return (IRR) is the discount rate that equates the NPV of an investing opportunity with IDR 0
(because the present value of cash inflows equals the initial investment). It is the rate of return that the
firm will earn if it invest in the project that receives the given cash inflows. Mathematically, IRR is the
value of r in equation that causes NPV to equal IDR 0.