The IRR can be defined as a discount rate which, when applied to a series of cash flows, generates a nil net present value (NPV). There may be more than one IRR in certain situations; additionally, Excel makes this calculation deceptively simple, at the risk of errors. Discounted cash flow (DCF) is a valuation method used to estimate the value of an investment based on its future cash flows. DCF analysis attempts to figure out the value of a company today, based ... The difference between NPV and IRR is that with IRR you calculate the actual return provided by the project’s cash flows. You then compare that rate of return with your required rate of return. Once all that calculating and comparison is through, if you find that the IRR is higher than your required return, the investment you’re considering would appear attractive. Fin-wiser Advisory has developed the single sheet Discounted Cash Flow (DCF) Template to helps user to understand the dynamics of Discounted Cash Flow (DCF) valuation. This template is designed to include one Actual period and ten forecast periods. May 06, 2013 · I’ve had several requests to make my discounted cash flow (DCF) spreadsheet publicly available. As a refresher, DCF analysis is a method of forecasting the cash flows that a company generates into the future, and then discounting them back to a present day value. How to calculate IRR? To understand why 13.92% is taken as the interest rate, we need to find the IRR. In an Excel sheet, first enter the original amount invested.