Work out discounted cash flow instantly with clear inputs, formula shown and shareable results.
Discounting future cash flows and subtracting the outlay gives net present value — the value created in today's money. The IRR is the discount rate at which that value is exactly zero, and the project is worth doing when the IRR exceeds the required return.
NPV and IRR
NPV = Σ CFₜ/(1+r)^t - C₀; IRR solves NPV = 0
Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.
NPV, because it measures value in currency. IRR can mislead when projects differ in size or cash flow shape.
As a liquidity check. It ignores discounting entirely, so it should never be the deciding measure.