IRR Calculator

Calculate Internal Rate of Return (IRR) and Net Present Value (NPV) for multi-year capital investments and commercial projects.

Calculator Inputs

$
Starting investment.
Comma-separated yearly inflows.
%
Cost of capital.

Calculated Results

Internal Rate of Return (IRR)
14.87% Annualized Return
Net Present Value (NPV at 10%) +$15,248.12
Profitability Index (PI) 1.30
Total Cash Inflows $65,000.00
Values calculate live as you adjust inputs.

About IRR Calculator

Finds the discount rate that makes the Net Present Value (NPV) of all future cash flows from an investment equal exactly to zero.

What is IRR Calculator?

Finds the discount rate that makes the Net Present Value (NPV) of all future cash flows from an investment equal exactly to zero.

How to Use This Calculator

  1. Enter initial capital investment (Year 0).
  2. Enter annual cash flow projections separated by commas.
  3. Enter hurdle rate for NPV comparison.
  4. View computed annualized IRR and NPV.

The Mathematical Formula & Variables

NPV = sum(CashFlow_t / (1 + IRR)^t) = 0

Step-by-Step Worked Example

Scenario: $50,000 investment returning [$12k, $15k, $18k, $20k, $22k].

  1. Total returned = $87,000 over 5 years.
  2. Newton-Raphson iteration solves for discount rate equating inflows to $50k.
  3. IRR = 19.34%.

Result: 19.34% IRR

Frequently Asked Questions

When should an investment project be accepted based on IRR?

Accept the project if the calculated IRR exceeds the company's hurdle rate or weighted average cost of capital (WACC).