Corporate finance
IRR Calculator
Find the annual rate that sets a cash-flow series' NPV to zero.
Results
A clear summary of your calculation.
Enter values and press Calculate to see an explanation.
INTERPRETATION
What does this mean?
Compare IRR with a required return. Cash flows that change sign repeatedly may have multiple IRRs; use NPV in that case.
Read the learning guide →FORMULA
Formula
IRR is the discount rate that makes the net present value of all cash flows equal zero.
WORKED EXAMPLE
Example
- Enter an initial investment of 1,000 as the time-zero outflow.
- Enter inflows of 600 in year one and year two.
- IRR is about 13.07%, the rate at which these cash flows have an NPV near zero.
Frequently asked questions
Why can IRR have multiple answers?
When cash flows alternate signs, the NPV curve may cross zero more than once.
Can IRR be found without both inflows and outflows?
Generally no. At least one positive and one negative cash flow are needed.
Should I compare projects using IRR or NPV?
When scale or timing differs, NPV often better reflects value at a chosen discount rate.