Does anyone know if when you calculate IRR does debt get excluded from the calculation? In other words, when I calculate my cash flow, do I exclude debt principal and interest payments? Also, if I do that, is my investment the total cost of the project or just my estimated equity on the project? A little confused on this point.

I do not calculate IRR as part of my job, but doing it with Excel should not be much of a problem using the IRR function.

Being that the last R stands for Return, I would use the amount of the investment that you are putting in. For example, the apartment building might be $1,000M, but your investment is $200M. I would use the $200M.

Regarding the cash flow, the only one that counts is the one coming to your pocket so I would deduct debt service. Also don’t forget the holding period and the expected sale of the property at the end. Otherwise you might end up with a very low or negative number.

Good luck