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.

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

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.

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.