IRR Calculator: Evaluate Investment Profitability
Our IRR Calculator finds the internal rate of return for uneven cash flows, computes NPV, MIRR, and profitability metrics.
What is IRR?
The discount rate making NPV zero. Measures project return independent of external rates.
IRR vs NPV vs MIRR
| Metric | Purpose | Formula |
|---|---|---|
| IRR | Break-even rate | Solve NPV=0 |
| NPV | Absolute value | Σ CF/(1+r)^t |
| MIRR | Realistic reinvestment | (FV positive / PV negative)^(1/n) - 1 |
When to Use IRR
- Compare projects
- Accept if IRR > cost of capital
- With NPV for ranking
Example: $100K Investment, Cash Flows: $30K, $40K, $50K
- IRR: 18.92%
- NPV @8%: $15,486
- MIRR: 15.27%
- PI: 1.15
How IRR is Calculated
Newton-Raphson iteration on NPV equation until ≈0.
Why IRR Matters
Pro Tips
- Use MIRR for realistic rates
- Check multiple IRRs
- Combine with payback
- Accept if IRR > hurdle rate
Limitations
- Assumes reinvestment at IRR
- Multiple rates possible
- No scale consideration
Conclusion
Assess investments with our IRR Calculator. Explore Finance tools.