IRR and XIRR Calculator
Compute the internal rate of return from regular or irregular dated cash flows. Analyse IRR and XIRR together with NPV/XNPV, the NPV profile and multiple-IRR diagnostics.
Compute IRR and XIRR from periodic or dated cash flows, then read NPV/XNPV, the NPV profile and multiple-root diagnostics together.
IRR and XIRR are the discount rates that set NPV/XNPV to zero. They are found numerically; there is usually no closed-form solution. Multiple sign changes can produce more than one real root. Large timing differences should be read with NPV, not IRR ranking alone.
Results
Notes on IRR and XIRR
What is IRR?
The internal rate of return is the discount rate that sets the net present value of a periodic cash-flow series to zero. It is a local, scale-free return measure.
What is XIRR?
XIRR is the annual effective rate that sets the date-weighted present value (XNPV) to zero, using Actual/365 day counts between cash-flow dates.
What is the difference between IRR and XIRR?
IRR assumes equal periods. XIRR uses real calendar dates, so irregular timing is reflected in the annual rate.
What is the difference between NPV and IRR?
NPV is a money amount at a chosen cost of capital. IRR is the rate that makes NPV zero. They answer different questions and can rank projects differently.
What is XNPV?
XNPV discounts dated cash flows with year-fractions (d_i − d_0)/365 at a stated annual rate.
What is the multiple-IRR problem?
If signs change more than once (Descartes’ rule of signs), several real roots can exist. The NPV profile shows them. Do not treat “the” IRR as unique.
When can IRR mislead?
Multiple roots, missing real roots, scale blindness, timing differences versus NPV ranking, and an implicit reinvestment assumption can all make IRR ranking unreliable on its own.
How is IRR compared with WACC?
If IRR exceeds the comparison rate (WACC or hurdle), the IRR criterion is met. Still read NPV at that same rate; do not treat a higher IRR as an automatic invest decision.
How should XIRR be read?
XIRR is an annual effective return consistent with the dated cash flows. Compare it with an annual WACC or required return, and confirm with XNPV.
Limits of IRR
- More than one sign change can produce multiple IRRs.
- Some cash-flow patterns have no real IRR.
- IRR does not show project scale.
- IRR ranking can differ from NPV ranking when timing differs.
- IRR embeds a reinvestment assumption that may be unrealistic.
- Investment decisions are more robust when NPV/XNPV is read with IRR/XIRR.
Because XIRR uses calendar dates, it usually represents irregular timing more faithfully than period IRR.
Simplifying assumptions
- IRR periods are equally spaced; the period type only annualizes the periodic rate.
- XIRR uses Actual/365 from the earliest cash-flow date after chronological sort.
- Rates are greater than −100%. The solver stays in the real domain (1+r > 0).
- MIRR is optional and uses the finance and reinvestment rates you enter.
- Results depend on the cash flows entered; they are not a credit approval or valuation opinion.
This calculator is for financial education and decision support. Results follow from your inputs and do not replace a budget, forecast or statutory report. The tool never recommends “invest” or “reject” as a firm decision.