Limitations
Multiple IRRs can exist with non-conventional cash flows.
IRR ignores project scale — use NPV alongside IRR.
Key takeaways
- Compare IRR to WACC
- Check NPV at hurdle rate too
Related calculators
Apply these concepts with formula-based tools on Calculator Factory.
- FinanceIRR Calculator
Calculate the internal rate of return for a cash flow series — the discount rate that sets NPV to zero.
- FinanceNPV Calculator
Calculate net present value for a series of cash flows at a given discount rate to evaluate project profitability.
- FinanceWACC Calculator
Calculate weighted average cost of capital from equity and debt weights, costs, and the corporate tax rate.
Related articles
FAQ
- IRR vs ROI?
- IRR is time-weighted and annualized; simple ROI ignores timing of cash flows.