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Internal Rate of Return (IRR) Calculator

Calculate Internal Rate of Return (IRR) based on investment amount and annual cash flows.

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Frequently Asked Questions

What is the Internal Rate of Return (IRR)?

The Internal Rate of Return is the discount rate that makes the net present value of an investment equal to zero. It shows the annual return percentage of the investment and is used to compare different investment alternatives.

How is IRR interpreted?

If the IRR is higher than your cost of capital (minimum expected return), the investment is profitable. For example, if your cost of capital is 20% and the IRR is 30%, the investment provides returns above your expectations.

What is the difference between IRR and NPV?

IRR shows the return as a percentage, while NPV (Net Present Value) shows the added value in monetary terms. Both methods should be used together in investment decisions.

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