NPV & IRR Calculator
Net present value and internal rate of return for a stream of cash flows.
How it works
A pound next year is worth less than a pound today, so future cash flows get discounted back: NPV = sum of CF_t / (1+r)^t, minus the initial outlay.
Positive NPV means the project beats your discount rate and is worth doing. The IRR is the discount rate at which NPV hits exactly zero — the project's own implied return. Where the two disagree on ranking, trust NPV; IRR misbehaves when cash flows change sign more than once.
Common questions
What discount rate should I use?
Your cost of capital, or the return available on the next best use of the money. Higher rates punish distant cash flows severely, which is the point.