NPV & IRR Calculator
Calculate Net Present Value (NPV) and Internal Rate of Return (IRR) from an initial investment and a series of periodic cash flows. Also reports payback period and an accept/reject verdict.
Input
Upfront outflow at year 0, entered as a positive number.
Net cash flow for each period after year 0, one value per line (commas/semicolons also work). Use negative numbers for a year with a net outflow.
Cost of capital / required rate of return used to discount future cash flows for NPV.
Output
| Metric | Value |
|---|---|
| No data yet | |
Guides
Net Present Value (NPV) and Internal Rate of Return (IRR) are the two most common metrics for deciding whether a project or investment is worth pursuing. Both work from the same idea: a dollar today is worth more than a dollar next year, because you could invest today's dollar and earn a return on it in the meantime. This calculator takes an initial investment and a series of future cash flows and computes both metrics, along with the payback period and a straightforward accept/reject verdict.
What NPV tells you
Net Present Value discounts every future cash flow back to today's dollars using your discount rate (your cost of capital, or the return you could get elsewhere), then sums them up alongside the initial outflow:
NPV = −Initial Investment + Σ [ Cash Flow(t) / (1 + rate)^t ]
- NPV > 0 — the project is expected to generate more value than it costs, discounted for time and risk. Accept.
- NPV < 0 — the project destroys value at that discount rate. Reject.
- NPV = 0 — the project exactly breaks even; the return equals your discount rate.
The discount rate you choose matters a lot — a higher rate penalizes cash flows further in the future more heavily, since money that arrives later is discounted more.
What IRR tells you
Internal Rate of Return is the discount rate at which NPV equals exactly zero — in other words, the effective annualized return the project itself generates. Because IRR has no algebraic closed-form solution for more than two cash flows, this calculator finds it numerically: it brackets a sign change in NPV as the rate varies, then narrows the bracket by bisection until NPV is essentially zero (or the bracket is tighter than 1e-10), with a hard cap on iterations so the calculation always finishes.
IRR requires the cash flow series to change sign at least once — an initial outflow followed by at least one inflow, or vice versa. If every cash flow points the same direction (all positive or all negative — for example, no upfront investment at all), there's no rate that zeroes out NPV, and the calculator reports that plainly instead of showing a meaningless number.
Compare IRR to your discount rate the same way you read NPV: IRR above your discount rate means the project outperforms your required return; IRR below it means it underperforms.
Payback period
Alongside NPV and IRR, the calculator reports the (undiscounted) payback period — how many years of cash flows it takes to recover the initial investment, interpolated to fractions of a year. This ignores the time value of money, so treat it as a liquidity/risk check rather than a profitability measure — a project can have a short payback period and still a negative NPV, or vice versa.
How to use it
Enter your initial investment as a positive number (it's treated as an outflow at year 0), list your expected cash flow for each subsequent year — one per line, negative for a year with a net outflow — and set your discount rate. Results update automatically as you type.
Why might NPV and IRR disagree?
For a single conventional project (one outflow followed by inflows), NPV and IRR almost always agree on accept/reject. They can disagree when comparing two mutually exclusive projects of different sizes or timing — NPV is generally the more reliable metric in that case, since it measures value in dollars rather than a rate.
This calculator runs entirely in your browser — none of the figures you enter are sent anywhere.