The Smart Calc

IRR Calculator

Calculate Internal Rate of Return for periodic cash flows with sign-change analysis.

Parameters

$

Results

Internal Rate of Return (IRR)

12.6%

Status

success

Evaluating Investment IRR

How It Works

Uses Newton-Raphson numerical analysis to solve for the discount rate at which Net Present Value (NPV) equals zero.

How to Use

1. Enter initial investment outlay. 2. Input cash flow amounts for each period. 3. View calculated IRR percentage.

Understanding the Results

IRR is the annualized effective yield generated by investment cash flows.

IRR FAQ

FAQ

What happens if cash flows have multiple sign changes?

Multiple sign changes in cash flow direction can produce multiple mathematically valid IRRs; our calculator flags this condition.

How is IRR used in decision making?

Projects are generally accepted if their IRR exceeds the company hurdle rate or cost of capital.