About IRR Calculator
Internal Rate of Return (IRR) is the discount rate that makes the net present value of all cash flows equal to zero. It's used to evaluate the profitability of investments.
IRR Calculation Tips
- Initial Investment: Enter as negative value (cash outflow)
- Cash Flows: Enter positive values for inflows, negative for outflows
- IRR Interpretation: Higher IRR indicates better investment
- Comparison: Compare IRR to required rate of return
- Limitations: IRR assumes reinvestment at calculated rate
- Multiple IRRs: Some projects may have multiple IRRs