NPV (Net Present Value) Calculator
NPV = sum of discounted future cash flows minus initial investment. Positive NPV = accept project.
Result
NPV
$44,433.75
Positive — accept project.
- Initial investment$100,000.00
- Discount rate10.00%
- Cash flows$20,000, $30,000, $40,000, $50,000, $60,000
- Sum of discounted CFs$144,433.75
- NPV$44,433.75
Step-by-step
- NPV = -100000 + Σ CF_t / (1+0.1)^t.
- Year 1: 20000 / (1+0.1)^1 = 18,181.82.
- Year 2: 30000 / (1+0.1)^2 = 24,793.39.
- Year 3: 40000 / (1+0.1)^3 = 30,052.59.
- Year 4: 50000 / (1+0.1)^4 = 34,150.67.
- Year 5: 60000 / (1+0.1)^5 = 37,255.28.
- NPV = -100000 + 144,433.75 = $44,433.75.
How to use this calculator
- Enter discount rate.
- Enter initial investment as a positive number.
- List annual cash flows (year 1, year 2, …) separated by commas.
About this calculator
Net Present Value sums the discounted future cash flows of a project and subtracts the initial investment. NPV > 0 means the project earns more than the required return — accept. NPV < 0 means it earns less — reject. The discount rate is typically WACC (for corporate projects) or required return (for individual investors).
Frequently asked
Money today is worth more than money tomorrow — risk, inflation, opportunity cost. The discount rate quantifies these.
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