About this calculator

How-to: enter the initial investment (as a positive number — we treat it as an outflow) and the expected net cash flow each year for years 1–6. NPV = Σ CF_t ÷ (1 + r)^t − initial. IRR is the discount rate where NPV = 0 (we solve by bisection). If IRR > your cost of capital, the project creates value. Use your weighted-average cost of capital (WACC) as the discount rate — typically 8–12% for private businesses.

Frequently asked questions

What discount rate should I use?

For a private business, use your Weighted Average Cost of Capital (WACC). Rule of thumb: 8–12% for stable SMBs, 15–25% for early-stage / higher-risk ventures. Public companies use CAPM-derived cost of equity (typically 7–10%).

Why does IRR sometimes give no answer?

If all cash flows are the same sign (never cross zero), IRR is undefined. If they alternate signs multiple times, there can be multiple IRRs — NPV is more reliable in that case.

Payback vs NPV — which matters more?

NPV is theoretically correct. Payback is a liquidity/risk sanity check — many CFOs require both a positive NPV AND a payback under 3–5 years for approval.

What does the NPV & IRR Business Investment Calculator do?

Discount up to 6 years of projected cash flows to Net Present Value, and solve for the Internal Rate of Return of the investment. How-to: enter the initial investment (as a positive number — we treat it as an outflow) and the expected net cash flow each year for years 1–6. NPV = Σ CF_t ÷ (1 + r)^t − initial. IRR is the discount rate where NPV = 0 (we solve by bisection). If IRR > your cost of capital, the project creates value. Use your weighted-average cost of capital (WACC) as the discount rate — typically 8–12% for private businesses.

Is the NPV & IRR Business Investment Calculator free to use?

Yes. Every calculator on Calcurly.com is free, works in your browser without sign-up, and can be embedded on your own website.

How accurate is the NPV & IRR Business Investment Calculator?

Results are calculated in real time using industry-standard formulas. Treat the output as a well-informed estimate — always cross-check with local regulations, product datasheets, or a qualified finance professional before committing to a purchase or a job.

What inputs does the NPV & IRR Business Investment Calculator need?

Enter values for: Initial investment (year 0), Discount rate / WACC (%), Year 1 cash flow, Year 2 cash flow, Year 3 cash flow, Year 4 cash flow. Sensible defaults are pre-filled where possible so you can start with a single change.

Can I embed the NPV & IRR Business Investment Calculator on my own website?

Yes — copy the iframe snippet at the bottom of this page, or use the Embed Generator to customise the size. The embedded version stays in sync with the live calculator on Calcurly.com.