— Business & Valuation
IRR Calculator
Calculate IRR for periodic cash flows or XIRR for dated, irregular flows. See NPV at your hurdle rate, MIRR, sign-change warnings for multiple IRRs, and the NPV profile curve.
Internal rate of return
25.75%
- Decision
- Accept
- MIRR
- 18.98%
- NPV at your hurdle
- $48,033
Try: A profitable project, Below the hurdle, Dated flows (XIRR), Two sign changes (multiple IRRs)
— The verification schedule
| Year | Cash flow | Discount factor at IRR | PV |
|---|---|---|---|
| 0 | $-100,000 | 1 | $-100,000 |
| 1 | $30,000 | 0.795 | $23,857 |
| 2 | $35,000 | 0.632 | $22,133 |
| 3 | $40,000 | 0.503 | $20,115 |
| 4 | $45,000 | 0.4 | $17,995 |
| 5 | $50,000 | 0.318 | $15,900 |
| Sum at IRR | $0 |
— The IRR, visualized
Download— How it works
IRR = the rate r such that Σ CFₜ ÷ (1 + r)ᵗ = 0 (solved iteratively). MIRR = (FV of inflows at the reinvestment rate ÷ PV of outflows at the finance rate)^(1/n) − 1. XIRR uses day-count exponents tₖ⁄365 over irregular dates.
What the IRR is, and how to use it
The internal rate of return is the discount rate that makes a project’s NPV exactly zero — the return baked into the cash flows themselves. The decision rule is simple: accept while the IRR clears your hurdle rate (your required return or cost of capital), reject when it doesn’t. Its appeal is that it’s a single, intuitive percentage you can compare against a borrowing rate or a benchmark. The calculator solves it iteratively, gives the accept/reject verdict against your hurdle, and — as a cross-check — shows the NPV at that same hurdle: a positive NPV and an IRR above the hurdle always agree, which is the tie-back to the NPV calculator.
Worked example — invest $100,000, receive $30k / $35k / $40k / $45k / $50k over five years: The rate that discounts those five flows back to exactly $100,000 is about 25.75%. IRR ≈ 25.75% — well above a 10% hurdle, so accept; the NPV at 10% is about +$48,000, which agrees.
MIRR, and IRR’s blind spots
IRR has two well-known traps, and the calculator handles both. First, plain IRR assumes every interim inflow is reinvested at the IRR itself — often unrealistically high. The MIRR fixes this by compounding inflows forward at a realistic reinvestment rate and discounting outflows at a finance rate, giving a more conservative, honest figure (it’s almost always lower than the IRR). Second, when a cash-flow stream changes sign more than once — an outflow, inflows, then a big outflow again — there can be more than one rate that solves NPV = 0. The calculator detects the sign changes, flags that multiple IRRs are possible, and in that case the NPV-profile chart shows the curve crossing zero more than once — your cue to trust the NPV and the MIRR over a single ambiguous IRR.
XIRR — for real, irregular dates
Real cash flows rarely land on neat annual boundaries: you invest in March, top up in July, take a distribution the following February. Switch to “By date” mode and enter each movement on its actual date — the calculator computes the XIRR, discounting every flow by its exact day count (tₖ⁄365), exactly as Excel’s XIRR does. This is the most-requested feature for a reason: it’s the only honest way to annualize a return when the timing is uneven. The verification schedule then shows each dated flow, its days from the start, and its discounted value — and because the discounted values sum to zero at the solved rate, the table is its own proof that the answer is right. Not investment advice; an IRR is only as good as the cash-flow estimates behind it.
— Reader questions
What is a good IRR?
There’s no universal number — a “good” IRR is simply one comfortably above your hurdle rate (your required return or cost of capital). An IRR of 12% is excellent against an 8% hurdle and a reject against a 15% one. That’s why the calculator asks for a hurdle and gives an explicit accept/reject verdict rather than judging the rate in isolation.
What is the difference between IRR and XIRR?
IRR assumes cash flows arrive at even, regular intervals (every year, quarter or month). XIRR works with actual calendar dates, discounting each flow by its exact number of days — so it handles irregular timing and matches Excel’s XIRR function. Use the “By date” mode whenever your flows don’t fall on tidy period boundaries.
Why is MIRR lower than IRR?
Plain IRR implicitly assumes you can reinvest every interim cash inflow at the IRR itself, which is often unrealistically high. MIRR reinvests those inflows at a realistic rate you choose (usually your cost of capital) instead, so it’s normally lower — and a more honest estimate of the return you’ll actually realize.
Can a project have more than one IRR?
Yes. When the cash-flow stream changes sign more than once — for example an outflow, then inflows, then another large outflow — the NPV-versus-rate curve can cross zero at several rates, each a valid IRR. The calculator counts the sign changes, warns you when this is possible, and shows the multiple crossings on the NPV profile. In those cases, rely on the NPV at your hurdle and the MIRR.
How do IRR and NPV relate?
They’re two views of the same cash flows. NPV discounts them at a rate you choose and reports a value; IRR finds the rate that makes that value zero. A project has a positive NPV at your hurdle exactly when its IRR exceeds that hurdle — which is why the calculator shows both, and why they always agree on accept or reject.