Finances

IRR Calculator

Calculate the Internal Rate of Return (IRR) to evaluate the profitability of potential investments.

-$

Initial cash outflow (entered as a positive number, treated as negative)

Future Cash Flows

Year 1
$
Year 2
$
Year 3
$
Year 4
$
Internal Rate of Return (IRR)
—%
Total Cash Out
$—
Total Cash In
$—
Net Profit
$—
ROI
—%
Comment Utiliser
  1. Enter your initial investment for Year 0.
  2. Enter the expected cash inflows or outflows for each subsequent year. (Use negative numbers if you have to invest more money in a given year).
  3. The IRR is the annualized effective compounded return rate that makes the net present value of all cash flows equal to zero.

Formule

NPV = Σ [ CFt / (1 + IRR)ᵗ ] = 0
CFt = Cash flow at time t
t = Time period (years)

The Internal Rate of Return (IRR) is a metric used in financial analysis to estimate the profitability of potential investments. IRR is a discount rate that makes the net present value (NPV) of all cash flows equal to zero. If the IRR exceeds your required rate of return, the investment is generally considered good.