FREE RETURNS CALCULATOR
Leveraged IRR Calculator
Calculate annual equity IRR after debt using equity contributions, distributions and net sale proceeds.
INDICATIVE RESULT
15.51%Total distributions€7,900,000
Equity multiple1.98x
The annual discount rate that sets equity cash-flow NPV to zero is 15.51%.
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How the leveraged irr calculation works
Leveraged IRR solves NPV = 0 using equity cash flows after loan draws, interest and principal repayment.
Example calculation
An investor contributes €4.0m, receives €180k annually and €7.0m after repaying debt at exit in year five.
INVESTMENT USE
How professionals use the result
Use leveraged IRR to assess the equity return produced by a financing structure. Compare it with unleveraged IRR to understand the effect of debt.
Common mistakes
- Leaving principal repayment out of exit proceeds
- Counting loan proceeds as income twice
- Mixing monthly and annual timing
- Ignoring refinancing cash flows
CLEAR ANSWERS