What is a good IRR for an investment?

It depends on the asset class and risk. For real estate, 10-15% IRR is typically considered good. For private equity, 20%+ is common. As a baseline, compare against the S&P 500 historical average of ~10% — if your IRR doesn't beat that for similar risk, reconsider.

What's the difference between IRR and NPV?

IRR is a percentage rate — the annualized return of an investment. NPV is a dollar amount — the value created or destroyed at a specific discount rate. Both should be analyzed together: a high IRR on a tiny investment may be less valuable than a moderate IRR on a large one.

What does NPV of zero mean?

An NPV of zero means the investment earns exactly your discount rate — no more, no less. A positive NPV means you earn above your hurdle rate. A negative NPV means you'd be better off investing at your hurdle rate instead.

Why use MIRR instead of IRR?

Standard IRR assumes intermediate cash flows are reinvested at the IRR itself — which is often unrealistic. MIRR uses separate rates for financing costs and reinvestment returns, giving a more conservative and realistic picture of true performance.

What is the payback period?

Payback period is how long it takes to recover your initial investment from cash flows. It's a simple liquidity metric — shorter is better. It doesn't account for the time value of money, so always use it alongside IRR and NPV.

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Is This Investment's Return Worth It? IRR & NPV Calculator

Is this investment's return worth it?

What This Does

Not all investments that "make money" are actually good investments. To know whether a project or investment truly creates value, you need to compare it against a hurdle rate — the return you could get elsewhere for the same risk. That's exactly what IRR and NPV are designed to do. IRR (Internal Rate of Return) is the discount rate at which an investment breaks even in present value terms. In plain English: it's the annualized return of the investment considering all cash flows and their timing. If IRR exceeds your required return, the investment creates value. If it falls short, you're better off putting money elsewhere. NPV (Net Present Value) tells you the dollar value an investment creates or destroys at your required discount rate. A positive NPV means the investment returns more than your hurdle rate. The magnitude of NPV tells you how much value is at stake. MIRR (Modified IRR) addresses a common criticism of standard IRR — it assumes a more realistic reinvestment rate for intermediate cash flows, giving a more conservative and often more accurate picture of returns. This calculator handles up to 10 years of cash flows, solves IRR iteratively using Newton-Raphson, and benchmarks your result against S&P 500 historical returns (~10%) and bond rates (~4-5%) so you can immediately understand whether the return is worth the investment.

When Should You Use This?

→Evaluating whether to invest in a rental property, business, or capital equipment
→Comparing two or more competing investment opportunities by their true returns
→Determining if a project clears your company's hurdle rate or required rate of return
→Analyzing private equity, venture deals, or any investment with irregular cash flows
→Stress-testing an investment by modeling NPV at different discount rates

Example Scenario

James is evaluating a small rental property. He'll put in $80,000 upfront. His projected net cash flows are: $6,500/year for years 1–3, $7,200/year for years 4–6, and then he expects to sell in year 7 for a net $105,000 (after mortgage payoff and selling costs). He enters these into the IRR calculator. His IRR comes out to 11.8% — above the S&P 500's historical average of 10%. NPV at a 8% discount rate is positive at $14,200. He decides the deal clears his hurdle rate and moves forward.

IRR Calculator

IRR · NPV · MIRR · Payback · NPV Curve · Cash Flow Visualization

Results update in real time as you adjust any input or cash flow.

Investment Parameters

Initial Investment

Treated as outflow (Year 0)

Hurdle Rate

WACC or minimum acceptable return

Reinvestment Rate (MIRR)

For MIRR calculation

Annual Cash Flows (positive = inflow · negative = outflow)

Year 1

Year 2

Year 3

Year 4

Year 5

About This Calculator

This IRR calculator uses Newton-Raphson iteration (up to 300 iterations, convergence threshold 1e-8) to solve for the internal rate of return — the discount rate at which NPV equals zero. NPV is computed as Σ(CF_t / (1+r)^t). MIRR uses separate finance and reinvestment rates: FV of positive cash flows at reinvestment rate / PV of negative cash flows at finance rate, raised to 1/n minus 1. Payback period uses fractional interpolation between periods. All results update in real time as you add, remove, or change any cash flow, or adjust investment parameters.

The Cash Flows tab renders a waterfall bar chart where Year 0 (investment) and any negative cash flows appear in red, positive cash flows in the accent colour. `LabelList` shows "$XXXk" labels above each bar. The NPV Curve tab renders a smooth line chart of NPV (y-axis) vs discount rate (x-axis) from 0% to IRR+20%, with a `ReferenceLine` at NPV=0 (horizontal), a `ReferenceLine` at the hurdle rate (vertical), and a `ReferenceDot` pinpointing the exact IRR crossover. Custom `NpvTooltip` shows NPV and accept/reject at each rate. The Cumulative (Payback) tab renders a line chart of cumulative cash flow over time, starting negative and rising to zero at payback — dots are accent when recovered, red when not.

Investment score (0–100): IRR vs hurdle rate tier (35 pts), NPV magnitude (30 pts), payback period tier (20 pts), profitability index (15 pts). Dynamic accent: emerald (Excellent ≥80), indigo (Strong ≥65), amber (Acceptable ≥45), orange (Below Hurdle ≥25), red (Reject). Three decision badges (IRR vs hurdle, positive NPV, PI vs 1.0) always shown in the result hero. Four auto-trigger flags: IRR below hurdle, negative NPV, payback over 5 years, multiple sign changes. Dynamic cash flow rows colour-code red for negative values in real time.

Results are estimates only and do not constitute financial, tax, or legal advice. Consult a qualified professional before making financial decisions.