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.

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.

Calculating the IRR, or an investment’s expected annual rate of growth, is no easy task for investors. Find the formula and tips for calculating IRR.

If the payments are made annually, the next step is straightforward. Use the =IRR () function in your spreadsheet to calculate the interest rate of the capital lease.