What is the difference between NPV and IRR in capital budgeting?

Net Present Value (NPV) calculates the total monetary value added by a project today after discounting cash flows. Internal Rate of Return (IRR) is the percentage yield where NPV equals zero.

When should a project be accepted based on NPV and IRR?

A project should be accepted if its Net Present Value (NPV) is positive (NPV > 0) and its Internal Rate of Return (IRR) is higher than the company's cost of capital or hurdle rate.

Capital Budgeting (NPV / IRR) CalculatorFY 2026-27

Evaluate business projects by computing mathematically precise Net Present Value (NPV) and Internal Rate of Return (IRR).

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Quick Summary: Capital Budgeting (NPV / IRR) Calculator

Capital budgeting helps businesses decide which projects or investments are worth pursuing. Net Present Value (NPV) provides the absolute value added today, while Internal Rate of Return (IRR) provides the percentage return on the project. If NPV > 0 and IRR > Cost of Capital, the project is generally considered financially viable.

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Last verified May 2026

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