How this calculator works
IRR is found numerically from an initial negative investment and equally spaced nonnegative receipts. This conventional cash-flow restriction ensures a single root above -100% when at least one receipt is positive. Nonconventional streams with later outflows are rejected because they can have multiple or no IRRs; use MIRR or NPV to examine them. Annualization compounds the periodic solution.
Formula
0 = -I + sum(CF_k/(1+i)^k). Effective annual IRR = (1+i)^m - 1, with m cash-flow periods per year.
Worked example
An initial $100 followed by $110 in one year has IRR 10%. An initial $100 followed by $60 and $72 at successive year ends has IRR 20%, because their present values at 20% are $50 and $50.
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Frequently asked questions
Why reject later negative cash flows?
They can create several mathematically valid IRRs or none. This tool reports a unique root only for conventional cash flows.
Can IRR be negative?
Yes. An investment of $100 returning only $80 after one year has IRR -20%.
Can I compare projects using IRR alone?
Differences in project size and timing can make NPV more informative. IRR is not a complete investment decision rule.