NPV and IRR Calculator
Introduction & Importance
Calculating Net Present Value (NPV) and Internal Rate of Return (IRR) by hand is crucial for evaluating investment projects and capital budgeting. It helps determine the profitability and feasibility of projects.
How to Use This Calculator
- Enter the cash flows for each year, separated by commas.
- Enter the discount rate.
- Click ‘Calculate’.
Formula & Methodology
NPV is calculated as the present value of all cash inflows minus the present value of all cash outflows. IRR is the discount rate that makes the NPV of the project equal to zero.
Real-World Examples
Data & Statistics
| Project | NPV | IRR |
|---|---|---|
| Project A | $100,000 | 15% |
Expert Tips
- Always use the appropriate discount rate.
- Consider the risk of the project.
Interactive FAQ
What is NPV?
NPV is a measure of the profitability of a project or investment.
Learn more about NPV – and IRR from Investopedia.