NPV and IRR Calculator
Updated on 22 Oct 2026 · Checked by Aotob
Discounted at 8% a year, the NPV is −$64.
The internal rate of return is 7.71%: the rate at which the NPV is zero.
Net present value
−$64
Negative NPV: it returns less than 8% a year.
Show the working
NPV = -10,000 ÷ 1.080 + 3,000 ÷ 1.081 + 3,000 ÷ 1.082 + 3,000 ÷ 1.083 + 3,000 ÷ 1.084 = -64
Discounted cash flows
| Year | Cash flow | Present value |
|---|---|---|
| 0 | -10,000 | -10,000 |
| 1 | 3,000 | 2,778 |
| 2 | 3,000 | 2,572 |
| 3 | 3,000 | 2,381 |
| 4 | 3,000 | 2,205 |
| Total | 2,000 | -64 |
Questions people ask
What is NPV?
Net present value: every cash flow discounted back to today at your required return, added up. Above zero means the investment beats that return.
What is IRR?
Internal rate of return: the discount rate that makes NPV exactly zero. It is the yearly return the cash flows give you.
Which should I use?
NPV tells you how much value a project adds; IRR tells you its rate. When comparing projects of different sizes, prefer NPV.
Updated 22 Oct 2026Source: Standard financial maths (time value of money)Checked by AotobCash flows at year ends. Not financial advice.Report an issue