IRR Calculator
Enter your initial investment and expected annual cash flows to compute the IRR, net present value, payback period, and return multiple.
Internal Rate of Return (IRR)
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Enter values above
Result
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Worked example
With the default inputs shown below, this calculator returns the following results:
| Input | Value |
|---|---|
| Initial Investment ($) | $100,000 |
| Annual Cash Flow — Year 1 ($) | $30,000 |
| Annual Cash Flow — Year 2 ($) | $35,000 |
| Annual Cash Flow — Year 3 ($) | $40,000 |
| Annual Cash Flow — Year 4 ($) | $45,000 |
| Annual Cash Flow — Year 5 ($) | $50,000 |
| Result | Value |
|---|---|
| Internal Rate of Return (IRR) | 25.75% |
| Result | 25.75% |
Values shown are produced by this page in your browser; change any input to update them.
How to use the IRR Calculator
- Initial Investment ($) — default $100,000
- Annual Cash Flow — Year 1 ($) — default $30,000
- Annual Cash Flow — Year 2 ($) — default $35,000
- Annual Cash Flow — Year 3 ($) — default $40,000
- Annual Cash Flow — Year 4 ($) — default $45,000
- Annual Cash Flow — Year 5 ($) — default $50,000
- Press Calculate to update the results instantly.
Frequently asked questions
IRR is the annual rate at which a project's cash flows break even — the discount rate where net present value is exactly zero.
By iteration: the calculator tests discount rates until the present value of all cash inflows equals the initial investment.
Compare it with your cost of capital. Small businesses often use 15-25% as a hurdle rate; anything above the cost of capital adds value.
The time until cumulative cash flows cover the initial investment. Shorter is safer, though not always more profitable.
Total cash returned divided by the amount invested. A 2.5x multiple means you got back $2.50 for every $1 invested.