Calculate returns from streams of payments and withdrawals
This capital budgeting calculator helps your clients quickly and simply determine the quality of an investment’s rate of return when there is a varying stream of payment or a varying stream of withdrawals as opposed to its net present value only. With the Internal Rate of Return calculator, you can communicate to your clients how to evaluate and interpret the true merits of investments as compared to alternatives.
You put $50,000 in an oil well in Year 1 and $20,000 in Year 2. Income starts in Year 3 at $22,000, Year 4 at $22,000, Year 5 at $22,000 and Year 6 only $20,000. What is the return on your money?
Answer: 6.76% (not including any taxes or depletion allowances)