Internal Rate of Return Calculator - With Irregular Cash Flows
IRR Calculator
Calculate Internal Rate of Return (IRR) for investments with irregular cash flows
($)
Year 1
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IRR Calculation Results
Internal Rate of Return (IRR)
Further Investments
Investment Period
Net Return
Return on Investment (%)
Detailed Cash Flow Analysis
| Time | Cash Flow | Net Cash Flow |
|---|
What Is the Formula for Calculating the Internal Rate of Return (IRR)?
The IRR is calculated using the following equation:
NPV = Σ [CFₜ / (1 + IRR)ᵗ] = 0
Where:
Where:
- NPV = Net Present Value
- CFₜ = Cash flow at time t
- IRR = Internal Rate of Return
- t = Time period
Investment Decision Guidelines
- IRR > Required Rate of Return: Accept the investment
- IRR < Required Rate of Return: Reject the investment
- IRR = Required Rate of Return: Indifferent (borderline case)
Note: Compare IRR with your cost of capital or benchmark rate (typically 8-12% for most investments).
References
- SEC Guide to Investment Analysis
- U.S. Treasury - Current Interest Rates
- Federal Reserve Economic Data
- Bureau of Economic Analysis - Investment Data
- Investor.gov - Investment Basics
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