Understanding your calculation
Method, example and limitations
How the calculation works
Internal rate of return is the discount rate that makes the net present value of a cash-flow series zero. Enter investments and receipts with opposite signs and preserve their order.
Example to check
An initial cash flow of −1,000 followed by +1,100 one period later has an IRR of 10%, since 1,100 ÷ 1.10 equals 1,000.
Before using the result
The rate is per cash-flow period, not necessarily per year. Irregular dates require a date-aware method. Cash flows that change sign repeatedly can have multiple IRRs or no useful solution.