NPV & IRR Calculator

How to use

1. Enter the cash flows, one per line — the first is usually negative (the investment). Each line is one period.
2. Set the discount rate to see the NPV. The IRR is calculated automatically.
3. A positive NPV means the project earns more than the discount rate. The IRR is the rate that would make the NPV exactly zero.

About this tool

NPV sums the present values of a stream of cash flows. A positive NPV means the project earns more than the discount rate you chose; zero means it earns exactly that rate; negative means it falls short. The discount rate is what your money would earn elsewhere — the opportunity cost — and the NPV tells you whether this project beats that alternative.

IRR is the discount rate that makes the NPV zero. If the IRR exceeds your required return, the project adds value. If the IRR is below it, the project does not earn enough to justify the risk. IRR is found numerically here by Newton-Raphson iteration, which converges quickly for well-behaved cash flows but can fail for unconventional ones — multiple sign changes, for instance, can produce multiple IRRs.

Both metrics assume cash flows happen at equal intervals and that interim flows can be reinvested at the discount rate (NPV) or at the IRR itself (IRR). That reinvestment assumption is the classical criticism of IRR. Everything runs in your browser: no data is transmitted.

The formula

NPV = Σ (cash flow at period t) / (1 + rate)^t, for t = 0 to n. IRR = the rate r such that NPV(r) = 0, found by Newton-Raphson: r(n+1) = r(n) − NPV(r(n)) / NPV′(r(n)).

Frequently asked questions