Thanks. I agree that IRR uses cashflow. Both NPV and IRR use cashflows.
My query is more of to confirm if the cashflows used in IRR computation are incremental cash outflow and total cash inflow per period or simply the NET cashflow (Total cash inflow and total cash outflow).
Examples which I came across clearly highlights NPV factors only the incremental outflow and the total inflow per period to arrive at the NPV at whichever point in time. The examples use total outflow per period less the total outflow for the prior period to arrive at the incremental cash outflow. The example attempted to emphasize the incremental element in the NPV computation.
Examples for IRR simply shows the total outflow compared to the total inflow per period to determine the amount to discount back ... and to eventually get the IRR (NPV=0). But at the start of these examples, reference book stated that IRR uses incremental cashflow per period. That's the cause of my query. Example did not empasize the incremental element but just focus on that IRR = NPV = 0, at whichever point in time.
There is another "type" of IRR - Incremental IRR but that is not my concern. That is more of application issue rather than concept.