IRR Calculator
Evaluate project profitability by calculating the Internal Rate of Return (IRR), NPV, and payback schedule.
Set the expected cash inflow for each year below:
| Year | Cash Flow | Discount Factor | Present Value | Cumulative PV |
|---|
How to use the IRR Calculator
- Set the Initial Investment Outlay (the negative cash outflow at Year 0).
- Adjust the Hurdle Rate / Target Return, which serves as your benchmark rate of return.
- Set the Project Duration (up to 15 years). This dynamically adds or removes cash flow inputs.
- Input the projected cash inflows for each year, or use the ⚡ Quick Fill features:
- Constant: Sets the same cash flow amount for all years.
- Compound Growth: Compounds a base amount by a specified rate annually.
- Reset to Zero: Clears all year inputs instantly.
- Evaluate the results: An IRR higher than the hurdle rate indicates a profitable project that exceeds target returns.
What is Internal Rate of Return (IRR)?
The Internal Rate of Return (IRR) is a financial metric used to estimate the profitability of potential investments. It is the discount rate that makes the Net Present Value (NPV) of all cash flows (both positive and negative) from a particular project or investment equal to zero.
Hurdle Rate is the minimum rate of return that an investor or corporation requires before investing in a project. If the calculated IRR is greater than or equal to the Hurdle Rate, the project is considered financially viable.
NPV Profile Curve shows the relationship between a project's Net Present Value and different discount rates. It is a line chart plotting NPV on the Y-axis against discount rates on the X-axis. The point where the curve intersects the horizontal axis (NPV = 0) corresponds directly to the IRR of the project.