About

NPV & IRR Calculator

Is an investment worth it?

Cash flows
Cash it brings in (or costs) each year

Minus sign for a year that costs money.

Year 1
Year 2
Year 3
Enter the cost, the return you need and at least one year.

Matches Excel’s NPV, IRR and MIRR by year, and XNPV and XIRR on exact dates.

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How it is worked out

  • NPV = Σ (cash in year t ÷ (1 + r)^t) − cost up front
  • IRR = the rate r at which NPV is zero
  • MIRR = (inflows grown at r to the end ÷ outflows discounted at r)^(1 ÷ years) − 1
  • XIRR = the rate where Σ amount ÷ (1 + rate)^(days since the first ÷ 365) = 0

Example: Spend $10,000 now for $3,000, $4,000 and $5,000 over three years. At a 10% required return the NPV is -$210.37, so it falls short. Its IRR is 8.90%, below the 10% needed, and it pays for itself in 2.6 years.

About the NPV & IRR Calculator

Is an investment worth it? Net present value, internal rate of return and payback from the money in and out.

How to use this tool

  1. Enter the cost up front and the yearly return you need.
  2. Enter the cash it brings back each year, adding years as needed.
  3. Read the NPV, IRR and payback, and the year-by-year table behind them.

Frequently asked questions

What is XIRR and when should I use it?

XIRR is the yearly return when money goes in and comes out on irregular dates: buying shares over time, a rental bought mid-year, or a loan repaid early. It counts the exact days between amounts, the same as Excel’s =XIRR. Switch to “On exact dates” and enter each date and amount.

What is MIRR, and why is it lower than IRR?

IRR quietly assumes every dollar the investment pays back is reinvested at the IRR itself, which flatters high-IRR projects. MIRR (modified IRR) assumes it is reinvested at the return you need instead, so it is usually lower and a fairer comparison. It equals Excel’s =MIRR with both rates set to the return you entered.

What is NPV?

Net present value: every future year’s cash is shrunk to today’s value by the return you need, then the cost up front is taken off. Above zero, the investment beats that return; below zero, it does not.

What is IRR?

Internal rate of return: the yearly return the investment itself earns. It is the rate at which NPV is exactly zero. If it is higher than the return you need, the investment is worth it.

What return should I use?

Use what the money costs you or could earn elsewhere: the interest rate on the loan paying for it, or the return you would expect from another use of the cash. Between 8% and 15% is common.

What is the payback period?

How many years until the cash coming back adds up to the cost. It ignores the time value of money and everything after that point, so read it next to the NPV rather than instead of it.

Does it match Excel?

Yes. NPV here equals Excel’s =NPV(rate, year 1 to year n) minus the cost up front (Excel’s NPV starts discounting in year 1), and IRR equals =IRR() on the same cash flows.