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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Last verified May 2026

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