📊 NPV Calculator – Net Present Value
Enter your initial investment, discount rate, and expected cash flows for up to five years to calculate the Net Present Value (NPV) of a project or investment.
What Is Net Present Value?
Net Present Value (NPV) measures whether a project or investment is expected to create value after accounting for the time value of money. It compares the discounted value of future cash inflows against the initial cost required to start the investment.
The Formula
NPV is calculated as NPV = Σ [CFₜ / (1 + r)^t] − Initial Investment, where CFₜ is the cash flow in year t, and r is the discount rate. Each future cash flow is discounted back to today’s value before the initial investment is subtracted.
How to Read the Result
A positive NPV means the projected discounted returns exceed the initial cost, suggesting the investment could be worthwhile at the chosen discount rate. A negative NPV suggests the investment would destroy value at that rate. This tool supports up to five years of cash flows — enter 0 for any years not used.
- For general financial planning and educational purposes only, not investment advice.
- Results are highly sensitive to the discount rate and cash flow estimates you choose.