Again, looking at a business project that requires an investment (I) you might want to know the rate of return that said investment will generate before you decide whether to go ahead or not. To do so, you simply recalculate the NPV equation, this time using zero as your NPV value and solving for the discount rate (r). The solution of the formula is the project’s Internal Rate of Return (IRR).
If the IRR is high, the business project you’re looking appears to be highly profitable, comparable to an investment at high interest rates, which you probably won’t find in the market. However, if the IRR is low, it could be an indication that you might be better off investing elsewhere. Whatever the result, don’t be hasty in your decision and consider all factors of the investment proposal (risk, timing, volumes, etc).