Skip to main content
Viva Calculator

Internal Rate of Return Calculator

Estimate IRR, payback period, and cash flow momentum for any project.

Calculate IRR
IRR compares your upfront capital to future inflows. Use the cash flow rows to capture rent, dividends, or distributions.

Include expected sale proceeds, refinance cash-out, or final balloon payments.

Projected annual cash flows

Leave unused years blank or enter negative numbers for additional capital needs • optional

This calculator provides educational estimates and is not investment, tax, or legal advice. Verify assumptions with a qualified professional before committing capital.
Table of Contents

How to Use

  1. Enter your total upfront investment as a positive number.
  2. Add projected annual cash flows for each year you want to analyze.
  3. Include a sale or exit value in the final value field if you plan to sell the asset.
  4. Select Calculate to view IRR, payback period, and the cumulative cash flow timeline.

What IRR Tells You

Internal rate of return is the discount rate that makes the net present value of all cash flows equal zero. It summarizes the annualized return of an investment after considering the timing of every inflow and outflow.

A higher IRR indicates your capital is returned faster and produces more growth per year. Comparing projects by IRR ensures you are accounting for both magnitude and timing of cash flows instead of just looking at total profit.

How to Interpret IRR

  • Compare IRR to your required return or cost of capital. Projects with IRR below that hurdle typically destroy value.
  • IRR assumes interim cash flows are reinvested at the same rate. Combine it with payback period, equity multiple, or cash-on-cash return for a fuller picture.
  • When comparing mutually exclusive projects, select the one with the highest IRR only if the scale and risk profile are comparable.
  • Extremely high IRRs often come from short projects or aggressive assumptions. Stress test rents, vacancy, exit cap rates, or growth.

Modeling Tips

Keep your cash flow calendar realistic. Align rent escalations, construction draws, and exit timing with the actual schedule for your asset.

  • Use negative cash flows for capital calls or renovation costs in later years.
  • Add an exit value to capture land sales, refinancing proceeds, or business sale multiples.
  • Run sensitivity scenarios by adjusting interest rates, rent growth, or hold periods to see how IRR reacts.
  • Pair IRR with net present value (NPV) or discounted cash flow (DCF) analysis to capture the dollar value created.

Frequently Asked Questions

Why is IRR different from ROI?
Return on investment looks at total profit divided by the original investment. IRR discounts every cash flow back to the present to show the compounded annual return that incorporates timing and partial cash returns.
What if I have irregular periods?
This calculator assumes each row represents a full year. For quarterly or monthly models, group those cash flows into yearly totals or run a spreadsheet IRR function with exact dates.
What is a good IRR?
A good IRR depends on the risk and leverage profile of your project. Many investors target 12-18% for stabilized real estate, 20%+ for value-add property, and higher for venture capital. Always compare IRR to your opportunity cost.

Related Calculators

finance
Cash on Cash Return Calculator – Real Estate ROI

Calculate cash on cash return for real estate investments

finance
DCF Calculator – Discounted Cash Flow Valuation Calculator

Calculate investment value using DCF analysis

finance
CAGR Calculator – Compound Annual Growth Rate Analysis

Calculate compound annual growth rate for investments and track returns over time