XIRR Calculator

Calculate the internal rate of return (IRR) on an irregular cash flow — a Day-1 outlay, a future tax-benefit inflow, and a deferred Year-2 tax obligation funded by a reserve. Adjust the inputs below to see your cash-on-cash return, time-weighted (XIRR) return, and a step-by-step breakdown.

Transaction Details

1. Net Cash Outlay

Amount ($)

Outflow Date

2. Total Net Tax Benefits

Amount ($)

Inflow Date

3. Income tax on inclusion Y2

Amount ($)

Obligation Date

4. Reserve & Tax Rates

Gross Rate (%)

Taxes (%)

Net Rate

Re-invest cleared cash at the net income rate to the 1-year anniversary specified above

Return Summary

Net Cash OutlayDay 1 Out-of-Pocket · —

Year 2 Tax Reserve@ 0.0% (0.0% net)Set aside —Matures — (0 days)

Net Tax Benefit (Over 2Y)Inflow less Y2 tax reserveReceived —

Net ProfitCleared cash less Day 1 outlayRealized —

Cash-on-Cash ReturnCleared profit ÷ Day 1 outlay(not annualized)

0.0%

Annualized Return (IRR)Time-weighted (0 days)— → —

0.0%

Full-Year IRR (income held)If cleared cash is held in income to the 1-year mark (—)

0.0%

Understanding the Cash Flow

Initial Investment: On —, you invest $0 out-of-pocket.

Inflow Received: 0 days later, on —, you receive an inflow of $0.

Reserve Invested: On that same date, you invest $0 at a gross rate of 0.00% (net 0.00% after tax) to fund the Year 2 obligation.

Cleared Cash: After reserving, $0 is cleared.

Obligation Paid: On —, the reserve matures to $0 net of tax and the Year 2 obligation is paid in full.

The Result: You are left with $0 in cleared profit — an annualized return (IRR) of 0.0% on your Day 1 outlay.

Why We Use XIRR

What it is: XIRR (eXtended Internal Rate of Return) is the single annualized rate that makes the present value of every dated cash flow equal to zero. In plain terms, it answers: “what constant yearly return would produce this exact set of payments on these exact dates?”

Why we use it: This strategy’s cash flows don’t fall on clean annual boundaries — money goes out on Oct 20, 2026, comes back on Apr 30, 2027, and a funded obligation settles on Apr 30, 2028. A simple cash-on-cash return (profit ÷ outlay) ignores timing, so it can’t fairly compare a 192-day deal to a 365-day deal. XIRR weights every dollar by the exact day it moves. The Year 2 obligation is brought to net present value at 2.00% net as of the inflow date to avoid spikes.

How to read it: An XIRR of 0.0% means the strategy compounds as if it earned that rate per year over its actual holding period — giving full credit for returning money early.

This tool is provided for educational and informational purposes only and does not constitute legal, tax, accounting, or financial advice.