What is IRR (Internal Rate of Return)?

IRR is the discount rate that makes NPV = 0. It's the effective annual return on an investment. If IRR > your hurdle rate (cost of capital), the investment creates value. Example: $100,000 investment yielding $30,000/yr for 5 years has IRR ~15.2%. Compare: if hurdle rate is 10%, invest; if 20%, don't.

What is a good IRR for an investment?

Private equity: 20–30%+. Real estate: 10–20%. S&P 500 historically: ~10%. Conservative portfolio: 5–7%. Corporate projects: typically 15–25% hurdle rate. IRR above your cost of capital = value creation. IRR below = value destruction. Also compare to alternative uses of capital.

IRR Calculator

🔗 Related Tools

Payback Period
ROI Calculator
Present Value
Average Return

Have Feedback or a Suggestion? Contact Us

calculator-pro.org

About Privacy Policy Terms of Service Contact

Calculator Pro provides general information only — not financial, medical or legal advice.

IRR Calculator

💱 Inputs

🔗 Related Tools

Related

Related Famous Birthdays