what does internal rate of return mean 
the internal rate of return irr is a financial metric used to assess the attractiveness of a particular investment opportunity when you calculate the irr for an investment you are effectively estimating the rate of return of that investment after accounting for all of its projected cash flows together with the time value of money when selecting among several alternative investments the investor would then select the investment with the highest irr provided it is above the investor s minimum threshold the main drawback of irr is that it is heavily reliant on projections of future cash flows which are notoriously difficult to predict 