IRR Calculator

Calculate the Internal Rate of Return (IRR) and Net Present Value (NPV) for an investment with irregular cash flows over multiple periods.

Enter Year 0 as a negative number (investment outflow). Future cash inflows are positive.
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Calculate the Internal Rate of Return (IRR) for an investment or project with our free calculator, a key metric for comparing the profitability of different opportunities.

How It Works

IRR is the discount rate that makes the Net Present Value (NPV) of all cash flows equal to zero. Since this typically requires iterative calculation, this calculator solves for IRR based on your entered initial investment and subsequent cash flows.

How to Use This Calculator

  1. Enter your initial investment (as a negative cash flow)
  2. Enter expected cash flows for each subsequent period
  3. Click Calculate to see the IRR

Frequently Asked Questions

What does a higher IRR mean?

A higher IRR generally indicates a more attractive investment, assuming cash flow projections are accurate, since it means expected returns exceed the discount rate by a wider margin.

How is IRR different from ROI?

ROI is a simple percentage return over the whole investment period; IRR accounts for the timing of cash flows, effectively an annualized rate of return factoring in when money is received.

What's a good IRR benchmark?

This depends on the investment type and risk level, compare IRR against your required rate of return or cost of capital to judge whether a project clears your threshold.

Can IRR give misleading results with unusual cash flow patterns?

Yes, projects with multiple sign changes in cash flow (money flowing in and out repeatedly) can produce multiple mathematically valid IRRs, requiring careful interpretation.