IRR measures the rate needed to break even on an investment. Calculate IRR by setting NPV to zero and solving for the discount rate. Use Excel's IRR function by inputting initial cost and cash inflow.

Internal rate of return (IRR): What is it and how is it calculated ... determining the IRR of a project or investment, it ...

The formula in this case results in an internal rate of return of 1.20%. What does this IRR of 1.2% mean? It means that if you lived to age 86, then you’d have to generate a return of 1.2% on ...