Finance terminology

Internal rate of return.  IRR or internal rate of return is the standard way of measuring the return on an investment. It is how financial analysts and Chief Financial Officers of companies measure the return on investment. It puts all investments on the same basis and accounts for both the riskiness of the investment and the timing of the cash outlays and the cash returns. It is similar to the more common concepts of the return on investment or, more simply, the interest rate you are earning on an investment. The IRR is measured as a percentage, e.g., 10% per year.

Net present value.  NPV or net present value is the standard way of measuring the total value of a financial investment. Think of it as the total of all the profits you make, less the cost of the initial investment. It puts all investments on the same basis and accounts for both the riskiness of the investment and the timing of the cash outlays and the cash returns. NPV is measured in dollars, e.g., $15,000 whereas IRR, the internal rate of return or the return on investment, is measured in %, e.g., 10%. The breakeven period is how many years it takes to get your money back.