The Internal Rate Of Return is the rate of interest which results in a zero net cash flow of a set of discounted cash in-flows compared with the original capital outflow (investment).

Another view is that the Internal Rate of Return is the discount rate which equates the present value of a stream of incomes to an initial investment. In special cases it can be the break-even rate of interest.

If the Internal Rate of Return is less than the minimum required return from a project, with a given risk profile, then the project would not be undertaken.

The Internal Rate of Return Calculator below makes the following assumptions:-

There is a one-time capital outflow at the beginning of the project (Time 0).

All future periodic inflows are the same (constant).

All incomes are received at the end of each period.

CLICK HERE if you have any ideas for calculators you would like to see added; or improvements to existing ones made. Please tell us of any errors observed!