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Internal Rate of Return (IRR)

The discount rate that makes a project NPV exactly zero.

IRR is the break-even return of a stream of cash flows; you accept projects whose IRR exceeds the cost of capital. It can mislead with non-conventional cash flows (multiple sign changes give multiple IRRs), so pair it with NPV.

Solve for r:  Σ_t  CF_t / (1 + r)^t = 0

import numpy_financial as npf
irr = npf.irr([-1000, 300, 400, 500, 600])