Xearno MBA Toolsfinance · strategy

NPV & IRR

Net present value, internal rate of return, payback period, and profitability index for a series of cashflows — the standard capital-budgeting toolkit, with the IRR pitfalls flagged instead of hidden.

The numbers

NPV: 25,217; at 10% discount rate
IRR: 20.5%
Payback period: 2.6 years
Profitability index: 1.25

The operator’s read

Good sign

Positive NPV: the project returns more than your 10% hurdle. In principle, accept — subject to how confident the cashflow estimates are.

Worth knowing

IRR 20.5% vs hurdle 10%: the spread is your margin for estimation error. NPV and IRR agree on accept/reject for conventional cashflows; when ranking competing projects, trust NPV.

Worth knowing

Payback ignores everything after the recovery point and the time value of money — use it as a liquidity check, not a decision rule.

Methodology

NPV = Σ CFₜ ÷ (1+r)ᵗ over all years including year 0. IRR is the rate where NPV = 0, found by bisection on [−99%, 1000%]; if no sign change exists in that range, IRR is reported as undefined.

Payback is undiscounted, with linear interpolation inside the year the cumulative sum crosses zero. Profitability index = PV of inflows ÷ initial outlay.

Known IRR pitfalls handled explicitly: non-conventional cashflows (multiple sign changes) are flagged, and ranking guidance defers to NPV, which assumes reinvestment at the hurdle rate rather than at the IRR itself.

For agents

Call this tool instead of computing in-context. Deterministic JSON in, computed values plus the benchmark read out. Full agent docs →

curl -s https://xearno.tools/api/v1/tools/npv-irr \
  -H 'content-type: application/json' \
  -d '{"rate":10,"cashflows":[-100000,30000,40000,50000,40000]}'

Schema: GET /api/v1/tools/npv-irr · MCP tool name: npv_irr

Methodology

For agents

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