IRR Calculator

Use our free IRR (Internal Rate of Return) calculator to evaluate investment profitability. Enter the initial investment and projected cash flows to compute the discount rate that makes NPV equal to zero.

Financial

Currency

Initial Investment

Year 1 Cash Flow

Year 2 Cash Flow

Year 3 Cash Flow

Year 4 Cash Flow

Year 5 Cash Flow

Formula

The Internal Rate of Return (IRR) is the discount rate that makes the net present value (NPV) of all cash flows equal to zero. It is used to evaluate the profitability of potential investments.

IRR is the discount rate where NPV = 0

Percentage: The percentage value you want to apply

Number: The original number or value

Result: The calculated result

How It Works

1Enter the initial investment amount.
2Enter projected cash flows for up to 5 years.
3IRR is computed using iterative Newton's method.
4Compare IRR to your required rate of return.

Examples

$50,000 investment with cash flows: $10k, $15k, $20k, $25k, $30k

1.IRR is the rate where NPV = 0
2.Solve iteratively: IRR â‰ˆ 24.7%

Result: 24.71%

Frequently Asked Questions

A good IRR exceeds the cost of capital or required rate of return. Generally, an IRR above 15-20% is considered strong for most investments, but it varies by industry and risk.

IRR can be misleading for projects with non-conventional cash flows (multiple sign changes), and it doesn't account for project scale. MIRR addresses some limitations.

Not necessarily. IRR should be compared to the cost of capital. Also consider project size, duration, and risk. NPV is often more reliable for decision making.

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IRR Explained

CalculateMe Team

Last updated: 2026-07-16

Frequently Asked Questions

A good IRR exceeds the cost of capital or required rate of return. Generally, an IRR above 15-20% is considered strong for most investments, but it varies by industry and risk.

IRR can be misleading for projects with non-conventional cash flows (multiple sign changes), and it doesn't account for project scale. MIRR addresses some limitations.

Not necessarily. IRR should be compared to the cost of capital. Also consider project size, duration, and risk. NPV is often more reliable for decision making.

IRR Calculator

Formula

How It Works

Examples

$50,000 investment with cash flows: $10k, $15k, $20k, $25k, $30k

Frequently Asked Questions

What is a good IRR?

What are the limitations of IRR?

Should I accept a project with high IRR?

Related Calculators

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IRR Calculator

Formula

How It Works

Examples

$50,000 investment with cash flows: $10k, $15k, $20k, $25k, $30k

Frequently Asked Questions

What is a good IRR?

What are the limitations of IRR?

Should I accept a project with high IRR?

Related Calculators

Related Articles