[CrazyCatDog]

The rate at which your project becomes NPV positive.

If it takes $100 one year to return $110, then the irr is 10%, because a 10% interest rate would cause you to owe $10 at the end of the first year, which is exactly equal to cash generated.

Irr usually takes average accounting income per year in the denominator e.g. $10 in our case, and divided by the investment size.

Note: an investment that yields $5 at the end of each of two years is more attractive than one that pays $10 at the end of two years. Both have average accounting income of $5 per year, and the IRR is the same for each investment!!!!!! NPV scores the first incessant higher than the later--yet another reason why irr is a bad metric