Calculating the IRR for a project with an initial outlay and single cash flow is very easy to do. It's also very practical for measuring the returns.

For that, we'll need to use a special function in Excel. Plugging the data into a spreadsheet, we'll use the XIRR function to calculate the internal rate of return for each project.

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 ...

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

If not, the investment is probably not worth pursuing. The actual formula to calculate IRR is rather complex, but fortunately there are several good IRR calculators available online, like this one.