IRR Calculator
IRR Calculator
Cash Flows
Investment Analysis
How it works: IRR (Internal Rate of Return) is the discount rate that makes the NPV of all cash flows equal to zero. It's used to evaluate the profitability of investments. If IRR > discount rate, the investment is acceptable. NPV (Net Present Value) calculates the present value of future cash flows using a discount rate. The payback period shows how long it takes to recover the initial investment.
Overview
Professional investment analysis calculator for calculating internal rate of return (IRR) and net present value (NPV). Analyze investment cash flows, calculate profitability metrics, and make informed investment decisions. Perfect for evaluating business investments and real estate projects.
About
IRR Calculator
Advanced calculator for internal rate of return and net present value analysis of investment cash flows.
Features:
- Calculate internal rate of return (IRR)
- Determine net present value (NPV)
- Analyze multiple cash flow scenarios
- Calculate profitability metrics
- Evaluate investment decision criteria
FAQ
What is internal rate of return (IRR)?
IRR is the discount rate that makes the net present value of all cash flows equal to zero. It represents the expected annual return of an investment.
How is IRR different from ROI?
IRR considers the time value of money and cash flow timing, while ROI is a simple return percentage. IRR is better for comparing investments of different durations.
What is net present value (NPV)?
NPV calculates the present value of future cash flows using a discount rate. Positive NPV indicates a profitable investment.
When should I use IRR vs NPV?
Use IRR to compare investment percentages and NPV to compare absolute dollar amounts. NPV is generally preferred for mutually exclusive projects.
What are the limitations of IRR?
IRR assumes reinvestment at the IRR rate, can give multiple values for unconventional cash flows, and may not work well with mutually exclusive projects.