Compound annual growth rate (CAGR) and internal rate of return (IRR) both measure investment performance but differ in complexity and flexibility.

Internal rate of return (IRR) is one of several well-known ... which has a built-in function to determine a project's IRR. When calculating IRR, you're solving for an NPV of zero.

The IRR is the interest rate (also known as the discount rate) that will bring a series of cash flows (positive and negative) to a net present value ... project with a slightly lower IRR to one ...