The Internal Rate of Return (IRR) is one of the most popular financial metrics used by investors, entrepreneurs, project managers, and analysts to evaluate how profitable an investment or project is expected to be. IRR expresses the annualized rate of return at which the net present value (NPV) of all cash flows becomes zero.
In simple words:
IRR tells you the exact rate at which your investment breaks even in today’s money. The higher the IRR, the more attractive the investment.