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IRR Calculator

The Internal Rate of Return (IRR) is the yearly return at which an investment's net present value is zero. It lets you compare projects with different sizes and timing.

How it works Report a problem

Internal Rate of Return

Calculate IRR based on cash flows

-$

Subsequent Cash Flows ($)

Year 1
Year 2
Year 3
Year 4
Year 5

IRR is the single yearly rate that makes an investment's cash flows break even in present-value terms. It lets you compare deals with very different shapes — money out now, uneven money back later — on one percentage. This calculator finds it from your list of yearly cash flows.

How to use this calculator

  • Enter the initial investment as a negative amount (year 0).
  • Add each year's cash flow: money received positive, money added negative.
  • Press calculate to see the internal rate of return.

How to use the answer

Compare the IRR with your required return or the cost of the money. Above it, the deal clears your bar; below it, it does not. Be careful with projects whose cash flows switch sign more than once — they can produce misleading or multiple IRRs, and a cash-flow chart is worth checking alongside.

Frequently asked questions

What is a good IRR?
It depends on the risk and the alternatives. Investors often compare IRR with their target return for that risk class; a higher IRR on a riskier project is not automatically better.
What is the difference between IRR and ROI?
ROI is total profit divided by cost, ignoring timing. IRR accounts for when money moves, so it rewards returns that arrive earlier.
Why can IRR not be found for some cash flows?
If the flows never change sign (all out or all in), there is no break-even rate. The project must have both investment and returns for an IRR to exist.