IRR calculator.
Use this free IRR calculator to evaluate an investment from its cash flows — the internal rate of return, net present value at your discount rate, profitability index, and how long until it pays back.
Use the IRR Calculator.
Results update automatically as you type. No account is required.
Enter the cash flows
The investment
The up-front cost (year 0 outflow) and the discount rate used for NPV — often your cost of capital or required return.
Cash flows by year
The net cash the investment returns at the end of each year. Add or remove years as needed; use a negative value for a year with a net outflow.
This investment returns an internal rate of return of 17.19%. At a 10% discount rate the NPV is +$8,565 (value-adding), and it pays back in 2y 10m.
Cumulative cash flow & payback
Your position starts negative (the initial outlay) and climbs as cash returns. It crosses the zero line at the payback point.
Cash-flow schedule
Each year’s cash flow and the running cumulative position, from the initial outlay to the end of the projection.
| Year | Cash flow | Cumulative |
|---|---|---|
| 0 | −$50,000 | −$50,000 |
| 1 | +$15,000 | −$35,000 |
| 2 | +$18,000 | −$17,000 |
| 3 | +$20,000 | +$3,000 |
| 4 | +$22,000 | +$25,000 |
About the IRR Calculator
This calculator evaluates an investment from its cash flows. Enter the up-front cost and the net cash it returns each year, and it computes the internal rate of return (IRR) — the annualized return implied by the cash flows — along with the net present value (NPV) at your discount rate, the profitability index, and how long the investment takes to pay back. The cumulative cash-flow chart shows your position climbing from negative to positive at the break-even point.
What IRR means
The internal rate of return is the discount rate at which the investment’s NPV equals zero — effectively the annual growth rate the cash flows earn on the money invested. A project is generally attractive when its IRR exceeds your required return or cost of capital. Because IRR is a single percentage, it is a convenient way to rank projects, though it should be read alongside NPV.
IRR vs. NPV vs. payback
NPV measures value created in today’s dollars at a chosen discount rate; positive NPV adds value. IRR expresses return as a rate but can be misleading for unconventional cash flows (multiple sign changes can produce more than one IRR, or none). Payback period simply tells you when cumulative cash flow turns positive — easy to grasp but it ignores the time value of money and anything beyond break-even. Used together they give a fuller picture.
Reading the results
The profitability index (PV of inflows ÷ initial investment) shows value created per dollar invested; above 1.0 is good. The discounted payback period applies your discount rate before counting recovery, so it is always at least as long as the simple payback. If the cash flows never cross zero, no IRR exists — lean on NPV in that case.
Important disclaimer
⚠ Disclaimer: This IRR calculator is for general education and planning only and is not financial advice. It assumes end-of-year cash flows and a single reinvestment view, and does not model taxes, inflation, risk, or interim financing. IRR can be ambiguous for cash flows with multiple sign changes. Verify figures and consult a professional before making investment decisions.
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ROI Calculator · Investment Calculator · Present Value Calculator · Future Value Calculator
IRR Calculator FAQ
What is the internal rate of return (IRR)?
It is the annualized return implied by an investment’s cash flows — the discount rate at which the net present value equals zero. A higher IRR means a more attractive return, all else equal.
How is IRR different from ROI?
ROI is the total percentage gain over the whole period and ignores timing. IRR is an annualized rate that accounts for when each cash flow occurs, so it lets you compare projects of different lengths fairly.
What is NPV and the discount rate?
NPV is the value an investment adds in today’s dollars after discounting future cash flows at your chosen rate — usually your cost of capital or required return. Positive NPV means the project creates value at that rate.
What is the payback period?
It is how long until cumulative cash flow turns positive and you have recovered the initial investment. The discounted payback applies the discount rate first, so it takes longer.
What is a good IRR?
It depends on your required return and risk. As a rule of thumb, an IRR comfortably above your cost of capital is good; for risky ventures investors often look for considerably more.
Why might there be no IRR?
If the cash flows do not change sign (for example, no initial outflow) or change sign multiple times, a single IRR may not exist or may not be unique. In those cases rely on NPV.
Is this IRR calculator free?
Yes. It is free, requires no sign-up, and runs entirely in your browser.