Final answer:
IRR is the Internal Rate of Return, which calculates the rate at which an investment breaks even. Payback period is not a comprehensive investment criterion.
Step-by-step explanation:
IRR stands for Internal Rate of Return. It is a financial metric used to evaluate the profitability of an investment by calculating the rate at which the project's net present value becomes zero. In simpler terms, it is the rate at which an investment breaks even.
As for what we cannot use as an investment criterion, one example is the payback period. The payback period measures the time it takes for an investment to generate enough cash flows to recover the initial investment. However, it does not consider the profitability of the investment or the time value of money, making it less comprehensive as a decision-making criterion.