IRR Calculator
Internal rate of return — the discount rate that makes NPV zero. The metric investors compare to their hurdle rate.
Free · No signup · By the analysts at Blackridge Research · Updated 2026-07-18
Inputs
Results
What this means
Adjust the inputs to calculate.
About the IRR Calculator
Internal Rate of Return (IRR) is the discount rate that makes the NPV of a project equal to zero.
It's the annualized effective compounded return rate that the project is expected to generate.
Formula
NPV = Σ(CFₜ / (1 + IRR)ᵗ) - Initial Investment = 0
- IRR
- — Internal Rate of Return
- CFₜ
- — Cash Flow at time t
- t
- — Time period
How to use this calculator
- 1
Enter initial investment
The upfront cost of the project.
- 2
Enter annual cash flows
The expected annual net cash flow from the project.
- 3
Enter project years
The expected life of the project in years.
Example calculations
Investment project evaluation
A project requires $100,000 investment and generates $30,000 annually for 5 years.
IRR = 15.2%. This exceeds the typical 10% hurdle rate.
- IRR:
- 15.2%
- Hurdle rate comparison:
- Exceeds 10%
The IRR of 15.2% exceeds the 10% hurdle rate, making the project attractive.
Interpreting your results
IRR > Hurdle Rate: The project is attractive and should be accepted.
IRR < Hurdle Rate: The project should be rejected.
IRR is useful for comparing projects of similar scale and duration.
Need the market data behind this calculator?
The IRR Calculator is only as good as its inputs. Blackridge Research publishes syndicated market reports with vetted market sizes, growth rates, and competitive landscapes across 40+ industries — and builds custom studies when the shelf report doesn't exist.
Industry applications
Business
- Capital allocation: compare investment opportunities.
- Project evaluation: assess project returns.
- Portfolio management: rank investment opportunities.
Construction
- Infrastructure projects: evaluate long-term project returns.
- Real estate development: assess development project viability.
Research
- Feasibility studies: IRR is a key metric for project viability.
- Investment analysis: evaluate research project returns.
Common mistakes to avoid
-
✗ Ignoring the scale of investment
IRR doesn't consider the size of the investment. A small project with high IRR may create less value than a large project with moderate IRR.
-
✗ Multiple IRRs
Projects with non-conventional cash flows can have multiple IRRs.
Frequently asked questions
›What is a good IRR?
It depends on the industry and risk. Generally, IRR above 15% is considered good for most projects.
›IRR vs NPV — which is better?
NPV is the gold standard. IRR is useful but can be misleading for projects of different sizes.
Glossary
- IRR:
- Internal Rate of Return — the discount rate that makes NPV zero.
- Hurdle rate:
- The minimum acceptable rate of return for an investment.
- Non-conventional cash flows:
- Cash flows that change sign multiple times, causing multiple IRRs.
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