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NPV and IRR calculator

NPV and IRR calculator

Cash flows per period (year)

Year 1
Year 2
Year 3
NPV (net present value)176,29 €
IRR (internal rate of return)8,9 %

If the NPV is positive, the investment creates value at that rate. The IRR is the return that makes the NPV equal to zero: compare it with your required rate. Not financial advice.

This NPV and IRR calculator works out the net present value and internal rate of return of an investment from its initial outlay, a discount rate and its cash flows.

Two ways to judge the same investment

NPV tells you how much value an investment creates today at your required rate; IRR tells you the rate at which that value hits zero. Used together, they give you a fuller picture than either one alone when comparing projects or deciding whether to go ahead. Not financial advice.

FAQ

What is NPV?
Net present value: the sum of all future cash flows, discounted to today at your required rate, minus the initial investment. If it's positive, the investment creates value at that rate.
What is IRR?
Internal rate of return: the discount rate at which the NPV equals zero. Compare it with your required rate — if the IRR is higher, the investment clears your bar.
Which one should I use to decide?
They usually agree, but NPV is the more reliable measure when comparing projects of different sizes or cash-flow patterns, since it reflects value in absolute terms rather than a rate.