📊IRR Calculator

About this tool

Enter the cash flows one per line, starting with the initial investment as a negative number for period 0. Add a discount or hurdle rate, and the finance and reinvestment rates for MIRR. The calculator gives the IRR, the NPV at your rate, the MIRR, the profitability index and the total net cash. It warns you when the cash flows change sign more than once, because then more than one IRR can exist.

IRR, NPV and MIRR explained

The internal rate of return is the discount rate that makes the net present value of a set of cash flows exactly zero, which is the annual return the project earns. Investing 50,000 and receiving 12,000, 15,000, 18,000, 20,000 and 10,000 over five years gives an IRR of about 15.0%. Against an 8% hurdle, the NPV is about 9,770, the value the project adds in today's money. A project is usually worth doing when its IRR beats the cost of capital and its NPV is positive. IRR has two known weaknesses. It assumes interim cash is reinvested at the IRR itself, which is often unrealistic, so the modified IRR uses your own finance and reinvestment rates instead, giving about 11.9% here. And when cash flows switch between negative and positive more than once, several rates can make NPV zero, so rely on NPV in that case. The profitability index, the present value of returns divided by the investment, helps rank projects when money is limited. Periods must be equal, usually years. Not financial advice. The NPV calculator, the payback period calculator and the ROI calculator give other views. How to calculate your break-even point (and what it doesn't tell you) covers a related question.

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