IRR (Internal Rate of Return) is a financial metric used to measure the profitability of an investment; the higher the IRR, the more profitable the investment will be. When it comes to projected IRR is the expected rate of return that includes initial assumptions and estimates to achieve the business plan. On the other hand, when it refers to Net IRR is the rate of return that the investor will receive from the investment, based on the actual cash inflows and outflows that occur during the life of the investment. Explore more Glossary items.