TUNTON Private credit · Monterrey
ESEN
Contact
ESEN
Tool

IRR & NPV calculator

Enter the initial investment, your annual discount rate, and the cash flows you expect each year: you'll get the project's IRR and its NPV at that rate, plus whether it's worth it.

Your opportunity cost: what you'd earn in the best comparable alternative (e.g. CETES of a similar term).
Annual IRR
—
—
Total received—
Nominal gain—
NPV at your discount rate—

Assumptions & method

  • IRR: the rate r that makes NPV = 0, with the investment in year 0 and the cash flows at the end of each year. Solved numerically (bisection).
  • Up to 5 annual cash flows are shown; leave years with no cash flow at 0.
  • If the cash flows change sign several times there may be more than one IRR; in those cases, interpret the result with caution — it's better to decide using NPV.
  • NPV: cash flows are discounted to present value at the annual discount rate you enter (your opportunity cost). Decision rule: accept the project if the IRR beats that rate — equivalent to NPV being ≥ 0.
FAQ

The essentials, in brief

What does the IRR tell me?
The project's implied annual return: if the IRR exceeds your opportunity cost (what you'd earn in the best comparable alternative), the project adds value; if not, the alternative is better.
What discount rate should I use?
Your opportunity cost: the rate at which you could really invest that money at comparable risk. For safe cash flows, a natural benchmark in Mexico is the CETES rate for a similar term; for a riskier business, something higher.
IRR or NPV — which should I trust?
When they conflict, NPV wins: the IRR can mislead with projects of different scales or cash flows that change sign. IRR is intuitive; NPV is the measure in pesos.
Is it useful for evaluating a loan I'm going to make?
Yes — enter the amount lent as the investment and the payments you'll receive as the cash flows. The IRR is the effective rate you're actually earning, with fees or haircuts already included in the cash flows.
Next step

Tell us about your deal

Tell us how much you need and what collateral you can offer. We will tell you frankly whether it is viable and how we would structure it.

Request via WhatsApp →