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What are the advantages of knowing the internal rate of return of a project or investment? Please explain with example(s).

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What are the advantages of knowing the internal rate of return of a project or investment? Please explain with example(s).

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The internal rate of return (IRR) is a capital budgeting method used by firms to decide whether they should make long-term investments. The IRR is the annualized effective compounded return rate which can be earned on the invested capital, i.e. the yield on the investment.

A project is a good investment proposition if its IRR is greater than the rate of return that could be earned by alternative ...

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