how is the irr rule used 
the irr rule is used as a guideline for deciding whether to proceed with a project or investment the higher the projected irr on a project the higher the net cash flows to the company as long as the irr exceeds the cost of capital in this case a company would be well off to proceed with the project or investment but if the irr is lower than the cost of capital the rule declares that the best course of action is to forego the project or investment 