Internal Rate of Return Method The internal rate of retur (IRR) method uses present value concepts to compute the rate of return from a capital investment proposal based on its expected net cash flows. This method, sometimes called the time-adjusted rate of return method, starts with the proposal's net cash flows and works backward to estimate the proposal's expected rate of return Let's look at an example of internal rate of return calculation with even cash flows. A company has a project with a 4-year life, requiring an initial investment of $182,900, and is expected to yield annual cash flows of $54,000. What is the internal rate of return? IRR Factor Investment