NPV Calculator
Enter an initial outlay and future cash flows to find the value left after discounting them to today.
Results
Review or adjust your inputs, then calculate to see your results and interpretation.
Understand this calculation
Positive NPV indicates value above the chosen discount rate; zero meets it exactly; negative NPV falls short.
See calculation method and assumptions
Formula
NPV
NPV is the sum of every cash flow from time zero onward, discounted to today.
Variables, rates and periods
- CF₀ / CFₜ
- CF₀ is the initial outlay (enter a positive investment; it is treated as an outflow). CFₜ is the cash flow in year t. Later inflows are positive and outflows negative.
- r
- Nominal annual interest or discount rate. Enter a percentage; formulas use decimals (5% = 0.05).
- N
- Final period count. This tool spaces subsequent cash flows one year apart; time zero is not discounted.
Cash-flow timing and discount rate
- Enter a positive initial investment;
- the tool records it as a time-zero outflow.
- Later rows are year-end cash flows and can be positive, negative, or zero.
- The discount rate is effective annual: enter 10 for 10%, while the formula uses 0.10.
- This page uses equally spaced years, not arbitrary cash-flow dates.
Value future cash flows today using a chosen discount rate.
Worked example
- Enter an initial investment of 1,000; the tool treats it as a time-zero outflow.
- Enter 600 for year one and year two, then set the discount rate to 10%.
- NPV is about 41.32, leaving a positive modeled value after applying the 10% hurdle rate.
Frequently asked questions
How is the initial investment entered?
Enter a positive outlay; the calculator treats it as a negative cash flow at time zero.
What does the discount rate represent?
It represents a required return or opportunity cost, chosen by the user.
Does positive NPV mean I should invest?
Not necessarily. Forecasts and discount rates are uncertain, and other risks and constraints matter.
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