Is This Investment's Return Worth It? IRR & NPV Calculator
Is this investment's return worth it?
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
Treated as outflow (Year 0)
WACC or minimum acceptable return
For MIRR calculation
Annual Cash Flows (positive = inflow · negative = outflow)
Results are estimates only and do not constitute financial, tax, or legal advice. Consult a qualified professional before making financial decisions.
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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.
- →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
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.
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.