Estimate internal rate of return from uneven periodic cash flows.
Overview
Internal Rate of Return (IRR) is the discount rate that sets net present value of an investment cash-flow stream to zero. It is widely used for project evaluation and capital allocation.
This calculator helps compare opportunities with different timing and magnitude of inflows and outflows. It is especially useful when investment decisions span multiple years.
IRR should be interpreted alongside NPV and risk context because high IRR does not always mean highest absolute value creation.
Steps
Input starting cash outflow as a negative value.
Provide projected inflows and outflows by period.
Use consistent period spacing for all entries.
Solve discount rate where NPV equals zero.
Compare IRR against required hurdle rate.
Validate decision quality with value-based metric.
Math
IRR solves: 0 = sum[CF_t/(1+IRR)^t]
The calculator iteratively finds the rate that discounts all projected cash flows to a net present value of zero.
Worked cases
Solve IRR where discounted inflows equal initial outflow
Returns annualized IRR estimate for project comparison.
Use all period-specific values in IRR equation
Captures timing effects that simple average return misses.
IRR > hurdle
Project may qualify, pending risk and capital constraints.
Why use this
Questions