IRR Calculator
Calculate Internal Rate of Return for your investment. Uses the bisection method to find the discount rate that makes NPV zero.
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Year 5
Internal Rate of Return (IRR)
25.75%
The discount rate at which the NPV equals zero
Initial Investment
$100,000.00
Total Cash Flows
$200,000.00
Total Undiscounted Profit
$100,000.00
NPV at Different Discount Rates
| Discount Rate | NPV | Status |
|---|---|---|
| 0% | $100,000.00 | Profitable |
| 5% | $71,068.88 | Profitable |
| 10% | $48,032.61 | Profitable |
| 15% | $29,440.37 | Profitable |
| 20% | $14,248.97 | Profitable |
| 25% | $1,696.00 | Profitable |
| 30% | -$8,784.17 | Not Profitable |
| 35% | -$17,616.96 | Not Profitable |
| 40% | -$25,126.44 | Not Profitable |
| 45% | -$31,562.36 | Not Profitable |
| 50% | -$37,119.34 | Not Profitable |
Frequently Asked Questions
What is Internal Rate of Return (IRR)?
IRR is the discount rate that makes the net present value (NPV) of all cash flows from an investment equal to zero. It represents the annualized expected rate of return.
What is a good IRR?
A good IRR depends on the industry and risk level, but generally an IRR above 10-15% is considered attractive. The IRR should exceed your cost of capital for the investment to be worthwhile.
What is the difference between IRR and ROI?
ROI measures total return as a simple percentage, while IRR accounts for the time value of money and gives an annualized rate of return across multiple periods.
Can IRR be negative?
Yes, a negative IRR means the total cash flows are less than the initial investment, indicating the project loses money on a present-value basis.