Internal Rate of Return (IRR) Calculator
Calculate IRR from cash flows: the rate at which NPV equals zero. Period 0 is initial outlay; later periods are inflows.
Use the Internal Rate of Return (IRR) Calculator
Enter cash flows: period 0 (initial outlay) and periods 1–4 (inflows). IRR is calculated where NPV = 0.
Cash flows
Period 0 is initial outlay (often negative). Periods 1-4 are inflows.
Results
IRR (annual)
12.83%
IRR is the rate where NPV = 0. No solution if cash flows have no sign change or multiple roots.
How this calculator works
We solve for the rate r such that the sum of cash flows discounted at r equals zero. Newton-Raphson is used.
How to interpret your results
Compare IRR to your cost of capital. If IRR is higher, the project may be acceptable.
FAQs
What is IRR?▾
The discount rate that makes the net present value of the cash flows equal to zero. Often used to evaluate projects or investments.
How do I enter cash flows?▾
Period 0 is usually the initial investment (negative). Periods 1, 2, 3, 4 are typically positive inflows.
When is IRR not defined?▾
When there is no sign change in cash flows, or multiple roots. The calculator shows a dash if no solution is found.
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