How to Get a Job For Project Managers

Learn how to write resume and interview

Leadership for Project Managers

Learn how to lead and drive project success.

Project Management Bootcamp

From a beginner to project management professional.

Agile Project Management and SCRUM with AI

Learn to run Scrum and Agile with AI.

Internal Rate of Return (IRR)

IRR is the discount rate that makes an investment's net present value equal to zero, meaning the present value of future cash inflows exactly matches the present value of cash outflows. It reflects the project's implied annual return; when comparing similar projects, the one with the higher IRR is usually preferred.

Key Points

  • IRR is the rate that sets NPV to zero (PV of inflows equals PV of outflows).
  • Decision rule: accept if IRR is greater than the required return or hurdle rate; among comparable options, higher IRR is better.
  • Limitations: nonconventional cash flows can produce multiple IRRs, and IRR can conflict with NPV or favor smaller, quicker returns.
  • Useful in agile portfolios to compare epics/features in a business case, alongside metrics like NPV and payback.

Example

Project A needs an upfront investment of USD 100,000 and returns 40,000 at the end of each of the next three years; its IRR is about 10%. Project B also needs USD 100,000 but returns 20,000, then 60,000, then 60,000; its IRR is about 16%. If the hurdle rate is 12% and risks are similar, choose Project B because its IRR is higher than the requirement and higher than Project A's IRR.

PMP Example Question

Your organization requires a minimum return of 12% on new initiatives. A proposed project has an IRR of 14%. What should the project manager recommend?

  1. Proceed, because IRR exceeds the required return.
  2. Reject, because IRR does not measure total profit.
  3. Defer, until the payback period can be shortened.
  4. Reject, because NPV must be zero to approve the project.

Correct Answer: A — Approve because the project's expected return (IRR) is above the hurdle rate.

Explanation: IRR represents the rate at which NPV equals zero. If IRR is greater than the organization's required return, the project meets the acceptance criterion.

Leadership for Project Managers Course

Lead with clarity, confidence, and real impact. This Leadership for Project Managers course turns day-to-day challenges—unclear priorities, tough stakeholders, and cross-functional friction—into opportunities to guide teams and deliver outcomes that matter.

You’ll learn practical leadership skills tailored to project realities: setting direction without overcontrol, creating alignment across functions, and building commitment even when authority is limited. We go beyond theory with tools you can use immediately—one-sentence visioning, stakeholder influence maps, decision framing, and feedback scripts that actually land.

Expect hands-on frameworks, real-world examples, and guided practice to prepare for tough moments—executive readouts, resistance from stakeholders, and high-stakes negotiations. Downloadable templates and checklists keep everything actionable when the pace gets intense.

Ready to influence without waiting for a bigger title? Join a community of ambitious PMs, sharpen your edge, and deliver with purpose—project after project.



Build complete project plans in minutes with AI

Stop spending hours on documentation. Learn how to use AI to create charters, WBS, schedules, risk registers, and executive reports faster—while staying fully in control. This course gives you ready-to-use prompt templates and practical workflows based on real project work. No guesswork, no fluff—just tools you can apply immediately. Backed by Udemy’s 30-day money-back guarantee, so you can start risk-free.

Learn More