IRR Calculator
Calculate the Internal Rate of Return for any investment with custom annual cash flows.
How to Use This Calculator
1. Enter the initial investment as a positive number.
2. Enter expected cash flows for each year — can be positive or negative.
3. Optionally enter a hurdle rate to see if the investment clears your minimum return threshold.
Decision rule: If IRR > your hurdle/discount rate, the investment is worth pursuing.
Real-World Examples
IRR ≈ 15.2% — beats a 10% hurdle rate
IRR ≈ 22%
Frequently Asked Questions
It depends on the asset class. Real estate: 15–20%+ for active investments. Private equity: 20–25%. Index fund alternative: 7–10%. Always compare to your opportunity cost.
Use NPV to compare projects of different sizes. Use IRR to evaluate a single investment against a hurdle rate. For most decisions, use both together.
If cash flows change sign more than once (multiple negative periods), there may be multiple IRRs. In that case, rely on NPV instead.
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