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IRR & NPV Calculator
Decide whether an investment is worth making. Enter the upfront cost, your required return, and the cash flows you expect, and see the internal rate of return, the net present value, and how long it takes to pay back — the three figures behind every capital decision.
Start from a template
Import cash flows (CSV or paste)
Paste or upload one yearly cash flow per line (up to five years). A leading year label is fine.
→ Investment return
NPV is positive — the return clears your hurdle
A positive NPV means the investment earns more than your 10% required return; a negative one means it doesn't. IRR (19.7%) is the break-even return — accept the project when IRR exceeds your hurdle rate. Both use the same cash flows, from two angles.
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Calculations run entirely in your browser. Figures are estimates for planning, not financial advice.
Two lenses on the same cash flows
IRR and NPV are the workhorses of investment analysis, and they're most powerful read together. NPV translates a stream of future cash into a single number in today's dollars, after charging the project for the return you require. IRR asks the reverse: what return does the project actually earn? When NPV is positive, IRR is above your hurdle rate — the two always agree on the accept/reject call, but each frames it differently for the decision-maker in the room.
The formulas behind the numbers
- NPV = −investment + Σ CFt ÷ (1 + r)t
- IRR = the rate r that makes NPV = 0 (this tool solves it numerically)
- Payback = the year cumulative cash flow first turns positive
Invest $100,000 for five years of rising cash flows (say $25k, $30k, $35k, $40k, $45k) and discount at 10%, and NPV comes to about $29,000 with an IRR near 20% — comfortably above the 10% hurdle, so the project creates value. Raise the discount rate and NPV shrinks; push it all the way to the IRR and NPV hits exactly zero.
Choosing the discount rate
The discount rate is the return you could earn elsewhere at similar risk — for a company, usually its weighted average cost of capital. Set it too low and marginal projects look better than they are; too high and you reject good ones. Because it drives the whole result, it's worth deriving deliberately: our WACC calculator gives you a defensible rate to plug in here.
Where IRR can mislead
IRR has quirks worth knowing. Cash-flow streams that flip between negative and positive more than once can produce multiple IRRs. IRR also implicitly assumes you reinvest interim cash flows at the IRR itself, which flatters high-return projects. And it ignores scale — a 40% IRR on $10,000 creates less value than a 20% IRR on $1M. When IRR and NPV disagree on ranking two projects, trust NPV. Feed both into credible financial projections rather than deciding on a single ratio.
→ Beyond the calculator
Building the investment case?
A return figure is one output; a decision needs the model behind it. We build the driver-based financial model and DCF that turn your cash-flow assumptions into a case investors and boards trust.
Frequently asked questions
- Both value an investment from the same cash flows, but they answer different questions. NPV gives a dollar figure: the value created after discounting future cash flows at your required return — positive means the project beats your hurdle. IRR gives a percentage: the discount rate at which NPV equals zero, i.e. the project's own rate of return. Use NPV to size the value created and IRR to compare the return against your cost of capital.
- NPV = −initial investment + Σ (cash flow in year t ÷ (1 + r)^t), where r is your discount rate. Each future cash flow is discounted back to today because a dollar next year is worth less than a dollar now. If the discounted inflows exceed the upfront cost, NPV is positive and the investment adds value.
- An IRR is 'good' when it comfortably exceeds your cost of capital (often your WACC) — that's the hurdle it has to clear to create value. Venture investors may want IRRs of 30%+; a stable business might accept 10–15%. Compare IRR to your hurdle rate, not to a universal number, and pair it with NPV, since a high IRR on a tiny project can create less value than a lower IRR on a large one.
- It's how long the investment takes to return its upfront cost from cumulative cash flow. It's simple and intuitive but ignores the time value of money and anything that happens after payback — which is exactly why IRR and NPV exist. Use payback as a quick liquidity check alongside them, not instead of them.
- Yes — it runs in your browser, nothing is stored, and there's no sign-up. When you need these returns built into a full, defensible financial model for a raise or a capital decision, that's what our financial modeling service does.