NPV & IRR Calculator
Enter what you invest and the cash you expect back, and see whether a project or investment is worth it: its net present value, internal rate of return and how long it takes to pay back.
What you pay out at the start (today, time 0).
The return you could get elsewhere, or your cost of borrowing (also called the hurdle rate).
End is the usual (and Excel) way. Start moves every flow one period earlier, like rent paid in advance.
One per line, or separated by commas, spaces or tabs (a column copied from a spreadsheet works). Use a minus or (brackets) for money out.
What you sell the equipment or business for after the last period. Added to the last cash flow.
Time is counted in days ÷ 365 from the earliest date, exactly like Excel's XNPV and XIRR.
What you pay to borrow for money going out.
What you can earn on money the project pays back.
Same discount rate, period and timing as above. Fill in both boxes to compare.
NPV profile: NPV at every discount rate
Cash flow table: present value of each flow
| Period | Cash flow | Discount factor | Present value | Cumulative | Cumulative PV |
|---|
How your NPV and IRR are worked out
NPV = each future cash flow ÷ (1 + rate)^time, added up, minus what you put in.
- 1
Discount each flow
$30,000 ÷ 1.1¹= $27,273
- 2
Add them up
5 flows today= $119,160
- 3
Take off the cost
$119,160− $100,000= $19,160 NPV
- 4
Find the IRR
NPV = 0 at17.60% a year
Read more: the formula, a worked example, MIRR, payback, XNPV and Excel tips
Money you get later is worth less than money you have today, because today's money could be earning a return in the meantime. Net present value (NPV) turns every future cash flow into today's money using your discount rate, adds them up and takes off what you invest. If the NPV is above zero, the project earns more than your discount rate. The internal rate of return (IRR) is the discount rate that makes the NPV exactly zero.
The formula
present value of a flow = cash flow ÷ (1 + rate)^periods away
NPV = sum of present values − initial investment
IRR = the rate at which NPV = 0
profitability index = sum of present values ÷ initial investment
payback = years before the last shortfall + shortfall ÷ next year's cash flow
MIRR = (money in grown at the reinvestment rate ÷ money out discounted at the finance rate)^(1 ÷ periods) − 1
rate per period = (1 + yearly rate)^(1 ÷ periods a year) − 1
XNPV = sum of cash flow ÷ (1 + rate)^(days from the first date ÷ 365)
Worked example
You invest $100,000 today and expect $30,000, $35,000, $40,000, $30,000 and $20,000 at the end of the next five years. Your discount rate is 10% a year.
| Year | Cash flow | ÷ 1.1^year | Present value |
|---|---|---|---|
| 0 | −$100,000 | 1 | −$100,000.00 |
| 1 | $30,000 | 1.1 | $27,272.73 |
| 2 | $35,000 | 1.21 | $28,925.62 |
| 3 | $40,000 | 1.331 | $30,052.59 |
| 4 | $30,000 | 1.4641 | $20,490.40 |
| 5 | $20,000 | 1.61051 | $12,418.43 |
The present values add up to $119,159.77, so the NPV is $119,159.77 − $100,000 = $19,159.77. The profitability index is $119,159.77 ÷ $100,000 = 1.19. Trying rates until the NPV reaches zero gives an IRR of 17.60%, well above the 10% you need, so the project is worth doing.
Payback: after two years you have $65,000 back and are $35,000 short; year 3 brings $40,000, so payback is 2 + $35,000 ÷ $40,000 = 2.88 years (about 2 years 10½ months). Discounted payback uses the present values instead: after three years you are $13,749.06 short, and year 4 is worth $20,490.40 today, so it is 3 + $13,749.06 ÷ $20,490.40 = 3.67 years.
MIRR with 10% for both rates: the money in, grown to year 5 at 10%, is $43,923 + $46,585 + $48,400 + $33,000 + $20,000 = $191,908. ($191,908 ÷ $100,000)^(1 ÷ 5) − 1 = 13.92%. Equal yearly amount: $19,159.77 × 0.1 ÷ (1 − 1.1^−5) = $5,054.30 a year, handy for comparing projects of different lengths.
Matching Excel and Google Sheets
- NPV: Excel's NPV() treats its first value as one period away. Put only the year 1 to year N flows inside it and take the investment off outside: =NPV(10%, B2:B6) − 100000. Putting the year 0 value inside gives $17,417.97, which is the real NPV divided by 1.1.
- IRR: =IRR(B1:B6) with B1 = −100,000. Excel starts from a 10% guess and returns one IRR; this calculator scans every rate and shows all of them.
- MIRR: =MIRR(B1:B6, finance rate, reinvest rate).
- Dated flows: =XNPV(rate, amounts, dates) and =XIRR(amounts, dates). Both count days ÷ 365 from the first date. Excel's help example (−10,000 on 1 Jan 2008, then 2,750, 4,250, 3,250 and 2,750 on 1 Mar 2008, 30 Oct 2008, 15 Feb 2009 and 1 Apr 2009) gives XNPV 2,086.65 at 9% and XIRR 37.34%; this calculator gives the same.
Quarterly and monthly cash flows
With a yearly rate and quarterly or monthly flows, the rate for one period is worked out by compounding: 10% a year is (1.10)^(1 ÷ 4) − 1 = 2.41% a quarter, not 2.5%, so four quarters add back up to exactly 10%. IRR and MIRR are shown both per period and as a yearly rate, (1 + rate per period)^(periods a year) − 1. Pick "% a period" if your rate is already for one period.
When IRR misleads
- Several IRRs: if the cash flows change between money out and money in more than once (for example a big clean-up cost at the end), the NPV can cross zero two or more times. −100, +230, −132 has IRRs of both 10% and 20%.
- No IRR: if the NPV never reaches zero, there is no IRR at all. Use NPV.
- Choosing between projects: the project with the higher IRR is not always the one with the higher NPV. The NPV profile chart shows where the two lines cross (the crossover rate). Below that rate the other project may be worth more. When in doubt, pick the higher NPV at your discount rate.
- Reinvestment: IRR assumes money paid back is reinvested at the IRR. MIRR uses a rate you choose, which is usually more realistic.
The results are only as good as the cash flow forecast and the discount rate you choose. Cash flows here are before or after tax depending on what you enter; use the same basis for the rate. The calculator does not include inflation unless your figures and rate do.
Common questions
How do you calculate NPV?
Divide each future cash flow by (1 + discount rate) raised to the number of periods away it is, add those present values up, then take off what you invest today. Investing 100,000 for 30,000, 35,000, 40,000, 30,000 and 20,000 over five years at 10% gives present values of 119,159.77, so the NPV is 19,159.77.
What is IRR and how is it found?
The internal rate of return is the discount rate at which the NPV is exactly zero. There is no direct formula, so the calculator searches every rate from −99.99% upwards and narrows down each place where the NPV changes sign. For the example cash flows the NPV is zero at 17.60%, so the IRR is 17.60% a year.
Why is my NPV different from Excel?
Excel's NPV function treats its first value as one period away and discounts it. If you include the year 0 investment inside NPV, the whole answer is divided by (1 + rate) once too often. Use =NPV(rate, year 1 to year N flows) minus the investment instead, which is what this calculator shows.
What is a good profitability index?
The profitability index is the present value of the future cash flows divided by what you invest. Above 1 means the project earns more than your discount rate, below 1 means it earns less. In the example, 119,159.77 ÷ 100,000 = 1.19, so each 1 invested brings back 1.19 in today’s money.
What is the difference between IRR and MIRR?
IRR assumes the money a project pays back is reinvested at the IRR itself, which can flatter high-return projects. MIRR lets you set the rate you can really reinvest at, and the rate you pay to finance outflows. In the example, reinvesting at 10% gives a MIRR of 13.92% against an IRR of 17.60%.
Can a project have more than one IRR?
Yes. When cash flows switch between money out and money in more than once, such as a big clean-up cost at the end, the NPV can cross zero at two or more rates. The calculator lists every IRR it finds and warns you. In that case, judge the project by its NPV or MIRR instead.
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