Internal Rate of Return (IRR) shows the actual percentage rate of return from the investment with taking discounting into consideration.

# Why is Internal Rate of Return (IRR) of a project important?

Internal Rate of Return (IRR) gives the rate of discount that yields Net Present Value (NPV) of zero considering the time value of money as it employs the discounting concept.

It uses discounted Cash Flows. Discounted Cash Flows are present values of future Cash Flows.

**https://www.superbusinessmanager.com/internal-rate-of-return-irr-of-an-investment/**