# Discount Rate vs. IRR

The more I learn about the discount rate and IRR the more confused I get.... This is related to real estate.

My confusion is that I've read that you should use your desired rate of return for the discount rate. For example, if you want a 10% return, use 10% to discount the future cash flows. If that's telling you your return, what is IRR telling you? And why is it more relevant?

But that's not the end of this story of finance, math, and alphabet soup. For investments that have multiple positive and negative cash flows, finding that r* becomes solving for the roots of a polynomial in r*, so that there can be multiple roots. Usually people use the lowest positive root but really it only makes sense for projects where `NPV(r)>0 for r<r*` and `NPV(r)<0 for r>r*`.
Or, you can take the future cash flows of a project, find the NPV as a function of the rate r, and find r* where NPV(r*)==0. That r* is the IRR. If `IRR=r*>10%` and the NPV function is well behaved as above, you can also do the project.