The Internal Rate of Return (IRR) Calculator in Capexplan helps you determine the profitability of potential investments by calculating the IRR, which is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.
- From the dashboard, go to the Help menu.
- Under the Help section, select Internal Rate of Return Calculator.
- Specify the number of periods over which the cash flows will be evaluated. For example, 4 periods. And click Start IRR
- Enter the cash flows for each period. Use negative values for cash outflows (investments) and positive values for cash inflows (revenues).
- The calculator will automatically compute the IRR based on the entered cash flows. By clicking the Calculate button.
Notes:
- Ensure that all cash flows are entered correctly, with negative values representing cash outflows and positive values representing cash inflows.
- The IRR is a critical metric for comparing the profitability of different projects. A higher IRR indicates a more profitable investment.
