The internal rate of return method uses cash flows rather than net income.The internal rate of return is calculated using cash flows.

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The internal rate of return method is a capital budgeting technique that takes into account the time value of money by considering the cash inflows and outflows of a project. The IRR is calculated by finding the discount rate at which the net present value of the project's cash flows equals zero. Therefore, the IRR method uses cash flows rather than net income.

The Internal Rate of Return Method Uses Cash Flows Rather