IRR / NPV Calculator

How this calculator works

NPV (Net Present Value) discounts every future cash flow back to today's dollars at a rate you choose — usually the return you could get elsewhere — and sums them against your initial cost. A positive NPV means the investment beats that benchmark; negative means it doesn't.

IRR (Internal Rate of Return) is the discount rate that makes NPV exactly zero — in plain terms, the investment's real annualized return. This calculator solves for it numerically, testing rates until it finds the one where the investment exactly breaks even in today's-dollar terms.

Reading the result

Compare the IRR to your required return (the same rate you entered for the NPV calculation). If IRR is higher, the investment clears your bar — if lower, your money would likely do better elsewhere. NPV tells you the same story in dollars rather than a percentage: a positive NPV at your required return means the investment adds value above that benchmark.

What this models — and its limits

This calculator assumes one investment today, followed by an equal cash flow every year (with an optional extra amount in the final year, useful for modeling an exit or resale). Real investments often have irregular cash flows year to year — this is a simplified, honest model for a common case, not a full-featured financial modeling tool.