Tool
IRR calculator
Enter the initial investment and the cash flows you expect to receive each year: you get the project's internal rate of return.
Annual IRR
—
The rate that makes the project 'break even' in present value
Total received—
Nominal gain—
NPV at 10% benchmark—
Assumptions & method
- IRR: the rate r that makes NPV = 0, with the investment in year 0 and the cash flows at the end of each year. Solved numerically (bisection).
- Up to 5 annual cash flows are shown; leave years with no cash flow at 0.
- If the cash flows change sign several times there may be more than one IRR; in those cases the result should be interpreted with caution and it is better to decide with NPV.
- The benchmark NPV uses 10% annual only as an illustration; your correct comparison rate is your opportunity cost.
FAQ
The essentials, in brief
What does the IRR tell me?
The project's implied annual return: if the IRR exceeds your opportunity cost (what you would earn in the best comparable alternative), the project adds value; if not, the alternative is better.
IRR or NPV — which should I trust?
When they conflict, NPV wins: the IRR can mislead with projects of different scales or cash flows that change sign. The IRR is intuitive; NPV is the measure in pesos.
Is it useful for evaluating a loan I am going to make?
Yes: enter the amount lent as the investment and the payments you will receive as cash flows. The IRR is the effective rate you are actually earning, with fees or haircuts already included in the cash flows.
Next step
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Tell us how much you need and what collateral you can offer. We will tell you frankly whether it is viable and how we would structure it.
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