What this calculator helps you do
Estimate the periodic discount rate that makes the net present value of entered cash flows equal to zero. The calculation runs entirely in your browser; SENNA Finance does not receive the values entered into this tool.
Worked example
Using the default example—initial investment of $-10,000, year 1 cash flow of $2,500, year 2 cash flow of $3,000, year 3 cash flow of $3,500, year 4 cash flow of $3,200—the calculator returns estimated irr of 15.26%; total undiscounted cash flow: $5,200.00; cash-flow periods: 5. Change the assumptions to match your own case rather than relying on the example.
Formula and calculation basis
Inputs are converted to the periodic units required by the formula. Results are calculated with full JavaScript numeric precision and rounded only for display.
How to interpret the result
Compare IRR with a required return only when cash-flow timing, risk, scale, and reinvestment assumptions are suitable.
Common mistakes to avoid
- Entering all cash flows with the same sign.
- Assuming a project with the highest IRR always creates the most value.
- Ignoring the possibility of multiple IRRs for non-standard cash-flow patterns.
Limits and assumptions
This calculator uses equally spaced periods and searches for one numerical root. Non-conventional cash flows can have multiple or no meaningful IRR.
Outputs are estimates, not contractual quotations, regulated disclosures, tax advice, investment advice, or a substitute for professional review.
Frequently asked questions
What sign should the initial investment use?
Typically an initial outflow is negative and later receipts are positive.
Is this monthly or annual IRR?
It is per entered period. If each cash flow is annual, the result is annual.
Why might no IRR be found?
Cash-flow signs or shape may not create a root in the searched range.
Sources and reference context
External references provide educational context and do not imply endorsement of SENNA Finance.