NPV and IRR Calculator
Use the NPV and IRR Calculator with your own values for Cash flows, and Discount rate. It reports Net present value, Internal rate of return, and Discounted future cash flows, shows the formula and worked example, and does not fetch live market or account data.
Learn the method: step-by-step examples and practice ↓
Calculate, then understand
Step-by-step learning lab
Identify whose cash flow this is and when it occurs. Enter the given values, then follow the calculation as each number changes.
NPV and IRR: two questions about one cash flow
How much value is added at the required return, and what rate makes NPV zero?
When to use it and why it works
Take the funder’s perspective: today’s payment is negative and later receipts are positive. NPV measures added value at your discount rate. IRR instead finds the rate at which discounted receipts exactly offset the initial payment.
NPV = Σ[t=0…n] CFₜ/(1+r)ᵗ; Σ[t=0…n] CFₜ/(1+IRR)ᵗ = 0
Work through an example
Pay 100 today and receive 110 in one year. At a required annual return of 5%, find NPV and IRR.
Read this example’s explanation
110/1.05 − 100 ≈ 4.7619; at a 10% discount rate, 110/1.10 − 100 = 0.
Your calculated answer
- Net present value: NPV
- 4.761905
- Internal rate of return per period
- 10%
- Present value of future receipts
- 104.761905
Follow each step
Discount this future receipt by its period
PV(CF1) = 110 ÷ (1 + 0.05)^1 = 104.76190476Add the present values of future receipts
104.761904762 = 104.76190476Add the negative initial outlay to obtain NPV
104.761904762 + (-100) = 4.76190476Solve for the periodic rate that makes NPV zero
-100 / (1 + r)^0 + 110 / (1 + r)^1 = 0; r × 100 = 10Substitute IRR and check that NPV is near zero
-100 / (1 + 0.1)^0 + 110 / (1 + 0.1)^1 = 0
Intermediate calculations retain precision; displayed values are rounded. Follow the precision requested by your question.
What the result means
NPV is an amount; IRR is a percentage per period. The displayed IRR is annual only for yearly cash flows, and IRR alone does not capture project size.
Mistakes to watch for
- Cash flows with later outlays can have multiple IRRs, so this version accepts one initial outlay followed by nonnegative receipts.
- Do not remove zero-cash-flow periods or put the initial outlay in year 1; it belongs to period 0.
- Positive NPV depends on the cash flows and discount rate you enter; it does not guarantee future receipts.
Try another question on your own
Pay 100 today, receive zero in year 1 and 121 in year 2, and require 10% annually.
Set up the formula first. Answers rounded to two decimals are accepted; use six decimals for absolute values below 0.01. For percentages, enter the number before the percent sign.
How to use this calculator
Enter Cash flows, and Discount rate.
Review the model boundary before calculating: Cash flows are treated as occurring at the end of each listed period.
Read Net present value, Internal rate of return, and Discounted future cash flows, then compare the result with the cited source and governing product terms.
Formula
Formula used: NPV = Σ CFₜ / (1 + r)^t; NPV(IRR) = 0. Percentages are converted to decimals before calculation.
Worked example
Example: with Cash flows = −1,000; 600; 600, and Discount rate = 10%, the calculated Net present value is 41.32.
Assumptions and limits
- Cash flows are treated as occurring at the end of each listed period.
- IRR can be absent or have multiple solutions when cash-flow signs change more than once.
- This educational estimate is not investment, tax, accounting, or legal advice.
Sources
- OpenStax: Internal Rate of Return (IRR) MethodNPV and IRR definitions, cash-flow timing, and decision limitations. Reviewed 2026-08-24.
- OpenStax, Rice University: Principles of Finance 2e — Net Present Value MethodOfficial formula or method source used by this calculator. Reviewed 2026-08-24.
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Verification
How this calculator is checked
Trust comes from reproducible evidence, not model confidence. You can inspect the formula, assumptions, worked example, and cited sources on this page.
- Versioned calculationFormula logic is kept separate from the interface and covered by automated registry and behavior checks.
- Cited evidenceSources linked for independent checking: 2.
- Transparent AI useAI may assist drafting or adversarial review. Agreement between models is not proof, and no human expert review is claimed unless a named reviewer is shown.
Frequently asked questions
How does the NPV and IRR Calculator work?
Formula used: NPV = Σ CFₜ / (1 + r)^t; NPV(IRR) = 0. Percentages are converted to decimals before calculation.
What should I enter in the NPV and IRR Calculator?
Enter Cash flows, and Discount rate using one consistent currency and time basis.
What should I verify before using the NPV and IRR Calculator result?
Verify these limits: Cash flows are treated as occurring at the end of each listed period. IRR can be absent or have multiple solutions when cash-flow signs change more than once. This educational estimate is not investment, tax, accounting, or legal advice.
Last updated 2026-08-25 · periodic-conventional-cashflow-bisection-v1 · content-2026-08-24 · Published by YunFanLabs