Net Present Value (NPV) Calculator

Evaluate the profitability of your investments with discounted cash flows

Investment Details

Initial Investment Amount ($)

Discount Rate (%)

Cash Flow Projections

Expected Future Cash Flows ($)

Year 1

Year 2

Year 3

Investment Analysis Results

Net Present Value (NPV)

$0.00

$0.00

Total Cash Flow Periods

0

Initial Investment

$0.00

Discount Rate

0%

About NPV

The Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment by calculating the difference between the present value of cash inflows and outflows over a period of time.

How to Use This Calculator

1. Enter your initial investment amount (usually a negative number representing cash outflow)
2. Enter the discount rate (your required rate of return or cost of capital)
3. Add expected future cash flows (positive numbers representing cash inflows)
4. Click "Calculate NPV" to get your result

Interpreting Results

• NPV > 0: The investment is expected to generate value and should be considered
• NPV < 0: The investment would destroy value and should be rejected
• NPV = 0: The investment breaks even (indifferent decision)

Important Notes

NPV accounts for the time value of money by discounting future cash flows. A higher discount rate will result in a lower NPV, as future cash flows are worth less in present terms.

For comparing projects of different sizes, consider using Profitability Index (PI) alongside NPV. For evaluating investment efficiency, Internal Rate of Return (IRR) can be helpful.