What is the IRR rule?

Under the IRR rule, an investment should be accepted if its IRR exceeds the required hurdle rate or cost of capital.

IRR Calculator

Calculate the Internal Rate of Return (IRR) for capital budgeting projects.

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Parameters

R Reset

Cash Flows (comma-separated, first is outlay)Ledger containing dates and amounts of irregular cash flows.

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Internal Rate of Return (IRR)

13.54%

Initial Cost-$10,000.00

Educational estimate. Not financial advice.

Result Interpretation

Higher historical IRR range of 13.54% reflects solid project viability relative to Corporate Cost of Capital Guidelines.

Mathematical Explanation

\sum \frac{CF_t}{(1+\text{IRR})^t} = 0

Solved IRR is 13.54%.

Estimate the yield rate of your investments by solving the discount rate where NPV equals $0.

Input variables:

Cash Flows (comma-separated, first is outlay): Bounded parameter in the mathematical model.

Understand IRR, the break-even discount rate where NPV equals zero, and how to evaluate investment hurdle rates.