IRR Calculator
Calculate the internal rate of return for a series of cash flows.
This tool runs entirely in your browser. Your files are never uploaded to a server.
| Year | Cash flow | |
|---|---|---|
| 1 | ||
| 2 | ||
| 3 |
IRR is found with a numerical search between -99% and 1000%; it requires the cash flows to change sign at least once.
8.90%
Internal rate of return (IRR)
What this calculator does
Searches for the discount rate at which a series of cash flows' net present value equals exactly zero — the internal rate of return (IRR), an annualized break-even return implied by the flows themselves.
How to use it
Enter the initial investment made today and one cash flow amount for each following year (add or remove rows as needed; each flow is assumed to land at the end of its year). Use one currency and one consistent time period throughout.
Worked example
With a 10,000 initial investment and cash flows of 3,000, 4,000 and 5,000 in years one through three, IRR is about 8.90% — the rate at which this series' net present value crosses from positive to zero. Automated tests verify this figure, along with the simpler case of a 100 investment returning 110 after one year, whose IRR is exactly 10%.
How the search works
The tool performs a numerical bisection search between -99% and 1000%, evaluating the same NPV formula used by the NPV calculator at each candidate rate and narrowing the range until net present value is close enough to zero. It requires the cash flows to produce at least one sign change in NPV across that range; an all-positive or all-negative series has no such crossing and returns no result.
Comparing to a hurdle rate
IRR is typically compared against a required rate of return or cost of capital: a project whose IRR clears that hurdle is conventionally favorable at this rate assumption, though the comparison is only as good as the entered cash flow estimates.
Known limitations of IRR
IRR can return multiple mathematically valid rates when cash flows change sign more than once, and this tool's search returns only one crossing within its range. It also implicitly assumes interim cash flows are reinvested at the same rate, which the Modified Internal Rate of Return (MIRR) addresses differently — IRR alone does not indicate the absolute size of the value created, which is what NPV reports.
Interpretation, sources and privacy
This is an educational estimate, not investment, tax or accounting advice. The IRR definition and its reinvestment-assumption limitation follow standard corporate-finance treatment as presented in Aswath Damodaran's valuation materials (NYU Stern). Reviewed September 2026. Calculation runs locally in the browser; Quiklio does not upload the entered values.
Frequently Asked Questions
- Why did the calculator return no result for my cash flows?
- IRR requires net present value to cross zero somewhere between -99% and 1000%; if every entered cash flow is positive or every one is negative relative to the initial investment, there is no such crossing and no rate satisfies the definition.
- Can more than one IRR exist for the same cash flows?
- Yes, when the cash flows change sign more than once (for example, a large cost partway through a project), the underlying equation can have multiple valid roots; this tool's bisection search reports only the one root it finds first in the -99% to 1000% range.
- Does a higher IRR always mean a better investment?
- Not by itself. IRR ignores the scale of the investment and assumes cash received partway through is reinvested at the same rate, so comparing IRR alone across very different-sized projects can be misleading — pairing it with NPV or the Modified IRR gives a fuller picture.