NPV and IRR Calculator
Enter the cost today, a discount rate and the cash expected in each following year, one per line.
Year 0 is today, so the first line is the cash at the end of year 1.
Worked examples
Four years of growing cash
Cost £1,000, discount rate 10%, cash 300, 400, 500, 600
NPV £388.77, IRR 24.9%
The positive NPV shows the project beats a 10% return.
About NPV and IRR Calculator
Net present value, or NPV, answers a simple question: after allowing for the time value of money, does an investment return more than it costs? It brings the cash from each future year back to today's value at your chosen discount rate, adds it up and takes off the cost. A positive result means the project beats your required return.
The internal rate of return, or IRR, shows the return the project itself delivers, the rate at which the NPV would be exactly zero. This page works out both from a list of yearly cash flows, along with the payback time and a table showing each year's cash and its value today. It suits business cases, equipment purchases, property improvements and any plan with money in and out over several years.
How to use NPV and IRR Calculator
- Enter the cost you pay today.
- Enter your discount rate, the return you need or could earn elsewhere.
- List the cash for each following year, one per line, using a minus sign for any year with a net outflow.
- Read the NPV, IRR and payback, and check the table of values.
Common uses
- Deciding whether to buy a machine, vehicle or software
- Comparing two projects with different timing of cash
- Testing a rental property improvement
- Checking a business plan against your required return
Sources
Last reviewed 18 October 2026.
Frequently asked questions
What does a positive NPV mean?
It means the investment returns more than your discount rate after counting the time value of money, so it adds value. A negative NPV means it returns less than you require, and a zero NPV means it just matches the rate.
What is a good IRR?
An IRR above the return you need is good. Compare it with the discount rate, what you could earn elsewhere, and the risk of the project. A higher IRR is better, but only if the cash flows are realistic.
Why might the IRR be missing?
IRR needs at least one outflow and one inflow. It is also not defined when the cash flows give no sensible rate. Use the NPV instead in those cases.
How are the years numbered?
The cost is at year 0, which is today. The first line you enter is the cash at the end of year 1, the second at the end of year 2, and so on.
Should I include tax and inflation?
Use cash flows after tax if you can, and either use real cash flows with a real discount rate or nominal cash flows with a nominal rate. Mixing them gives misleading results.