📈 NPV & IRR Calculator
Enter a discount rate and your yearly cash flows (year 0 is today, usually a negative outlay) to get the NPV and IRR.
Cash flows (year 0 = today, usually a negative outlay)
Net present value (NPV)
197.81
Internal rate of return (IRR)
15.24%
Positive NPV — the return beats your discount rate.
NPV discounts every future cash flow back to today: NPV = Σ CFₜ ÷ (1 + rate)ᵗ. A positive NPV means the investment earns more than your discount rate. IRR is the discount rate at which NPV equals zero — the project's own rate of return (n/a if the cash flows never change sign). Educational, not investment advice. 🔒 In your browser.
How the npv & irr calculator works
Net present value discounts every future cash flow back to today and sums them: NPV = Σ CFₜ ÷ (1 + rate)ᵗ, where t is the year. A positive NPV means the cash flows are worth more than the discount rate demands — the investment adds value. The internal rate of return (IRR) is the discount rate at which the NPV is exactly zero — the project's own break-even rate of return — found here by bisection. Add or remove years to match your project's length.
Compare IRR against your required return (the discount rate or "hurdle rate"): if IRR exceeds it, NPV is positive. IRR is undefined when the cash flows never change sign (all inflows or all outflows), and unconventional flows (multiple sign changes) can have more than one IRR — NPV is the more robust measure. Educational, not investment advice.
Frequently asked questions
How do you calculate NPV?
Discount each cash flow to the present and add them up: NPV = Σ CFₜ ÷ (1 + r)ᵗ. For an outlay of $1,000 today and $300 a year for five years at 8%, the NPV is about $198 — positive, so it beats the 8% rate.
What is IRR?
The internal rate of return is the discount rate that makes NPV zero — the effective annual return the cash flows earn. If IRR is above your required return, the project has a positive NPV.
What does a positive NPV mean?
That the investment's discounted cash flows exceed its cost at your chosen discount rate — it creates value and clears your required return. A negative NPV means it falls short.
How are NPV and IRR related?
IRR is the discount rate at which NPV equals zero. So if your discount rate is below the IRR, NPV is positive; above the IRR, NPV is negative. They're two views of the same cash flows.
Why is my IRR shown as n/a?
IRR requires the cash flows to change sign at least once (an outlay followed by returns). If every value is positive or every value is negative, there's no rate that zeroes the NPV, so IRR is undefined.
Which is better, NPV or IRR?
NPV is generally the more reliable decision rule — it directly measures value added and handles unusual cash-flow patterns, whereas IRR can be undefined or have multiple values. IRR is a useful, intuitive summary rate alongside it.
Educational information, not financial advice. These calculators use standard formulas with the figures you enter; results are illustrations, not guarantees. For decisions about your money, consult a qualified, regulated financial professional.