Internal Rate of Return (IRR) Calculator

Calculate the profitability of your investments with precision

Investment Details

Initial Investment Amount ($)

Cash Flow Projections

Expected Future Cash Flows ($)

Year 1

Year 2

Year 3

Investment Analysis Results

Internal Rate of Return (IRR)

0.00%

0.00%

Total Cash Flow Periods

0

Initial Investment

$0.00

About IRR

The Internal Rate of Return (IRR) is a financial metric used to estimate the profitability of potential investments. It's the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

How to Use This Calculator

1. Enter your initial investment amount (usually a negative number representing cash outflow)
2. Add expected future cash flows for each year (positive numbers representing cash inflows)
3. Click "Calculate IRR" to get your result

Interpreting Results

• IRR > Required Rate: The investment is considered good and should be accepted
• IRR < Required Rate: The investment may not be worthwhile and should be rejected
• IRR = Required Rate: The investment breaks even (indifferent decision)

Important Notes

IRR calculations assume that all cash flows are reinvested at the same rate as the IRR, which may not always be realistic. For projects with unconventional cash flows, multiple IRRs may exist, which can complicate the analysis.

For more accurate comparisons between projects, consider using Modified Internal Rate of Return (MIRR) or Net Present Value (NPV) alongside IRR.