Finance & Irish taxes · Calculator companion · By K Imports
Annual investment IRR and cash-flow value: practical guide
This guide explains how to use the Count.ie annual investment irr and cash-flow value. Solve annual investment return from signed cash flows and assess discounted value. Follow the inputs, method and worked example below, then compare your own scenario.
Guide written .
Open the Annual investment IRR and cash-flow value calculatorWhat to prepare
- Have the figures for annual discount rate (%) ready, from a dated document, with the period (annual, monthly or per transaction) that each input expects.
- Note the date of the transaction, since this model has no year selector and fixed rates may have changed.
- Separate known facts from assumed rates before relying on the headline result.
Understand the inputs
The calculation method
Discount today and subsequent annual flows; solve a single-sign-change IRR by bisection.
Worked example
Illustrative inputs and their result.
Example inputs
- Cash flows: today, year 1, year 2…
- -10000, 3000, 4000, 5000
- Annual discount rate (%)
- 5
Calculated example result
- Irr Percent
- 8.8963%
- Net Present Value
- €804.45
How to interpret the result
Signed flows: investments negative, receipts positive. Distinguish a tax saving, a tax bill, cash received and money remaining: they are not interchangeable. An estimate does not establish eligibility, filing compliance or when a refund will be paid.
Change one input of annual investment irr and cash-flow value at a time and record the result; keep a record of the year, date and assumptions so a change in the result can be explained.
Common mistakes to avoid
- Do not mix tax years or apply a newly announced measure to an earlier transaction.
- Avoid counting an allowance, credit, contribution or loss twice.
- Check exclusions and personal circumstances before relying on the headline result.
Assumptions and sources
Signed flows: investments negative, receipts positive. IRR may be absent or ambiguous; supported root range is -99.99% to 10,000%.
If your case falls outside this scope, use a more suitable calculator or contact us about an unclear method.