NPV Calculator

Use our free NPV (Net Present Value) calculator to evaluate investment opportunities. Enter the initial investment, projected cash flows, and discount rate to compute net present value and profitability index.

Financial

Currency

Initial Investment

Year 1 Cash Flow

Year 2 Cash Flow

Year 3 Cash Flow

Year 4 Cash Flow

Year 5 Cash Flow

Discount Rate (%)

Formula

Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. A positive NPV indicates a profitable investment.

NPV = Î£(CFt/(1+r)^t) - Initial Investment

Percentage: The percentage value you want to apply

Number: The original number or value

Result: The calculated result

How It Works

1Enter the initial investment amount.
2Enter projected cash flows for up to 5 years.
3Enter the discount rate reflecting risk and opportunity cost.
4NPV shows whether the investment creates or destroys value.

Examples

$50,000 investment, cash flows: $15k, $18k, $20k, $22k, $25k at 10% discount rate

1.PV inflows = $15k/1.10 + $18k/1.10^2 + ...
2.NPV = PV inflows - $50,000

Result: $24,735

Frequently Asked Questions

A positive NPV means the investment is expected to generate more value than its cost, considering the time value of money. It suggests the investment should be accepted.

The discount rate should reflect the risk of the investment and the opportunity cost of capital. Common choices include WACC, cost of equity, or a required rate of return.

NPV gives the dollar value added by the investment, while IRR gives the percentage return. NPV is generally preferred for comparing mutually exclusive projects.

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NPV Guide

CalculateMe Team

Last updated: 2026-07-16

Frequently Asked Questions

A positive NPV means the investment is expected to generate more value than its cost, considering the time value of money. It suggests the investment should be accepted.

The discount rate should reflect the risk of the investment and the opportunity cost of capital. Common choices include WACC, cost of equity, or a required rate of return.

NPV gives the dollar value added by the investment, while IRR gives the percentage return. NPV is generally preferred for comparing mutually exclusive projects.

NPV Calculator

Formula

How It Works

Examples

$50,000 investment, cash flows: $15k, $18k, $20k, $22k, $25k at 10% discount rate

Frequently Asked Questions

What does a positive NPV mean?

What discount rate should I use?

How is NPV different from IRR?

Related Calculators

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NPV Calculator

Formula

How It Works

Examples

$50,000 investment, cash flows: $15k, $18k, $20k, $22k, $25k at 10% discount rate

Frequently Asked Questions

What does a positive NPV mean?

What discount rate should I use?

How is NPV different from IRR?

Related Calculators

Related Articles