What the IRR Calculator does
This IRR calculator finds the internal rate of return of a series of evenly spaced cash flows - the discount rate at which their net present value is exactly zero - and shows the NPV at your own hurdle rate, the modified IRR, the payback period and the full NPV profile. It uses the same convention as the spreadsheet IRR function, so its answers can be checked against one.
It also looks for trouble. When the flows change sign more than once, for example a project with a large clean-up cost at the end, there can be two or more rates that make NPV zero. The calculator scans for every one of them and warns you instead of silently reporting whichever it found first.
How to use it
- Enter one cash flow per line, starting with time 0. Money paid out is negative; money received is positive. Use 0 for a period with nothing.
- Say how long each period is. The IRR is a rate per period; for monthly or quarterly flows the page also shows the equivalent yearly rate.
- Enter the discount rate you would require (your hurdle or cost of capital) to see the NPV, and a finance and reinvestment rate for the MIRR.
- Read the IRR together with the NPV and the chart. If a warning appears about multiple IRRs, rely on the NPV and MIRR instead of the IRR.
Reading the results
If the IRR is above your required rate, the NPV at that rate is positive and the project earns more than it costs to fund - for a conventional project (money out first, then money in).
The NPV profile curve shows NPV at every discount rate. Where it crosses zero is the IRR. A curve that crosses twice means two IRRs; one that never crosses means there is no IRR at all.
MIRR assumes the cash coming in is reinvested at a rate you choose rather than at the IRR itself, which is why it is usually lower and often more realistic for projects with a high IRR.
Worked example: a five-year project
A business spends 70,000 now and expects 12,000, 15,000, 18,000, 21,000 and 26,000 at the end of years 1 to 5. The IRR is 8.66% a year - the same figure the spreadsheet IRR function returns for these flows.
At a required return of 8%, the present values of the inflows are 11,111.11, 12,860.08, 14,288.98, 15,435.63 and 17,695.16, which add up to 71,390.96. Subtracting the 70,000 outlay leaves an NPV of 1,390.96, positive as expected because 8.66% is above 8%.
Cumulative cash is still 4,000 short after year 4 and year 5 brings 26,000, so the undiscounted payback is 4 + 4,000 / 26,000 = 4.15 years. With an 8% finance rate and a 6% reinvestment rate, the MIRR is 7.71%, below the IRR because the inflows are assumed to earn only 6%.
Formulas and scoring rules
- Net present value
NPV(r) = CF0 + CF1 / (1 + r) + CF2 / (1 + r)^2 + ... + CFn / (1 + r)^nCF0 is at time 0 and is not discounted.- Internal rate of return
IRR is the r that makes NPV(r) = 0Found by Newton's method with a bisection fallback; every root between -99% and 1,000% is also located by scanning.- Modified IRR
MIRR = (FV of inflows at reinvest rate / PV of outflows at finance rate)^(1/n) - 1- Yearly equivalent
annual = (1 + periodic IRR)^(periods per year) - 1- Spreadsheet NPV()
NPV() discounts the first value by one period too, so it equals NPV(r) / (1 + r)Rates are shown to 2 decimals of a percent; money to 2 decimals.
Why a project can have two IRRs
The NPV equation is a polynomial in 1 / (1 + r), and a polynomial can have as many real roots as its coefficients change sign. A mine that costs 1,600 to open, earns 10,000 in year 1 and then costs 10,000 to restore has IRRs of 25% and 400%. Both are mathematically correct and neither is a useful answer.
In that situation the sensible measure is NPV at the rate you actually require. At 10%, that mine has an NPV of -773.55, so it destroys value even though both of its IRRs are above 10%.
Limitations: what the result does not prove
- It assumes cash flows are evenly spaced. For flows on irregular dates, such as monthly investments with occasional withdrawals, use the XIRR calculator.
- IRR is not a measure of size. A small project can have a higher IRR than a much larger one that creates more value; compare NPVs when choosing between projects.
- The answer is only as good as the forecast cash flows. It does not account for risk, taxes or inflation unless your figures already do.
- When no IRR exists or there are several, the page says so rather than reporting a single number.
Privacy: where your data goes
Everything you paste, type or drop is processed in this browser tab. It is not uploaded, logged, stored or sent to analytics. Session recording and tag-manager scripts are switched off on this page.
Standards and sources
- Microsoft Support - IRR function - checked 19 Sep 2026
- Microsoft Support - MIRR function
- Microsoft Support - NPV function
Frequently asked questions
What does IRR actually mean?
It is the discount rate at which the money you put in and the money you get back are worth the same in today's terms. For a normal investment, it is the yearly return the project earns on the money still tied up in it.
Why is my IRR different from the spreadsheet IRR function?
It should not be for the same flows. Check that the first value is the time-0 flow, that periods are evenly spaced, and that empty periods are entered as 0 rather than skipped. Spreadsheet NPV() differs from this page's NPV because it discounts the first flow too; the page shows both.
What is the difference between IRR and MIRR?
IRR implicitly assumes money coming in is reinvested at the IRR itself. MIRR lets you state a finance rate for outflows and a reinvestment rate for inflows, and always gives a single answer. For projects with a very high IRR, MIRR is usually a more realistic yearly return.
Can the IRR be negative?
Yes. If the money you get back adds up to less than you put in, the IRR is negative. A project costing 1,000 that returns 950 a year later has an IRR of -5%.
Why does the calculator say there is no IRR?
Either every cash flow has the same sign, so NPV can never be zero, or the NPV curve never crosses zero between -99% and 10,000%. In both cases there is no rate to report, and the NPV at your chosen discount rate is the figure to use.
How do I convert a monthly IRR to a yearly rate?
Compound it: (1 + monthly IRR)^12 - 1. A monthly IRR of 1.50% is about 19.53% a year, not 18%. Set Each period is to a month and the page shows the yearly figure next to the monthly one.
Is a higher IRR always better?
Not when comparing projects of different size or length, or when cash flows change sign more than once. A higher IRR on a smaller project can still add less value. Use NPV at your required rate to rank mutually exclusive choices.
Last reviewed by the A2Z.Tools team against the sources listed above.
