How to Calculate an Internal Rate of Return With a Straight Line Method of Depreciation. Every day, business managers make capital budget decisions -- choices about whether to invest in projects ...

The Internal Rate of Return formula references a technique for evaluating capital investments. This function enables you to calculate interest earned on an investment by converting all cash flows ...

The next step is to use the =IRR () formula in Excel to calculate our internal rate of return. That formula returns 16.2%, which is our internal rate of return for this investment.

Learn about the internal rate of return (IRR), how to calculate it and why it matters to traders.

The IRR formula is a dollar-weighted calculation and takes into account both the size and timing of cash flows into and out of an investor's portfolio.