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Financial calculators and cash flows · IRR · Cash flow
IRR · Cash flow. IRR is the rate that makes NPV exactly zero; it is found by iteration.
IRR · Cash flow
Mathematical examples based on your inputs; taxes, fees and market forecasts are not included.
Results are for study and planning. Check decisions about real money with a qualified professional.
Your calculation
- IRR (%)
- 8.8963394693
How the calculation works
IRR is the rate that makes NPV exactly zero; it is found by iteration.
A worked example
- Cash flow
- -1,000 · 300 · 400 · 500
Step by step
- Sign of each flow: − + + + → 1
- Period 0: -1,000 ÷ (1 + 8.896 %)^0 = -1,000
- Period 1: 300 ÷ (1 + 8.896 %)^1 = 275.49
- Period 2: 400 ÷ (1 + 8.896 %)^2 = 337.31
- Period 3: 500 ÷ (1 + 8.896 %)^3 = 387.2
- Check: Σ = 0 → IRR (%) = 8.896
The first flow is the negative investment and all flows use the same period length. If the signs change more than once, there can be several IRRs.
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