Financial Tool
NPV & IRR Calculator
Evaluate any investment by discounting its cash flows and finding the rate at which it breaks even.
What are NPV and IRR?
Net Present Value (NPV) sums all future cash flows of a project —
discounted to today at a required rate of return — and subtracts the initial investment.
A positive NPV means the project creates value above the hurdle rate;
a negative NPV means it destroys it.
The Internal Rate of Return (IRR) is the discount rate that makes the
NPV exactly zero. It represents the project's own implied return. If the IRR
exceeds your cost of capital or hurdle rate, the investment is worth pursuing.
Both metrics are the cornerstones of capital budgeting and
investment appraisal.
NPV = ∑ CFt / (1+r)t − C0
CFt cash flow at year t
r discount rate
C0 initial investment
IRR r where NPV = 0
✅ NPV > 0The project returns more than the required rate — accept it. The larger the NPV, the more value it creates.
📐 IRR vs. hurdleIf IRR > cost of capital, the project clears the bar. Use it to rank competing investments.
⚠️ Limits of IRRIRR can be misleading with non-conventional cash flows (multiple sign changes). NPV is always the safer decision rule.
Parameters & Cash Flows
%
Your required rate of return or WACC.
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Analysis Results
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NPV
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IRR
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Profitability index
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Total inflows (undiscounted)
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Total outflows (undiscounted)
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Payback period
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Positive DCF
Negative DCF
| Period | Cash flow | Discount factor | Discounted CF | Cumul. NPV |
|---|