Internal rate of return (IRR)

An accounting method for calculating the return achieved on a (potential) investment by equating the net present value (NPV) of cash inflow over time to zero. IRR is often used in capital budgeting, it´s the interest rate that makes net present value of all cash flow equal zero. Essentially, IRR is the return that a company would earn if they expanded or invested in themselves, rather than investing that money abroad.