NPV Calculator

Calculate the Net Present Value of an investment with projected cash flows

Last reviewed: July 2026How we build & verifyEstimate only. Verify important decisions with a qualified professional

Discount Rate (%)

Initial Investment ($)

Yearly Cash Flows

Year 1

Year 2

Year 3

Year 4

Year 5

How it works

Net Present Value discounts every future cash flow of a project back to today and subtracts the upfront cost. A positive NPV means the project is expected to earn more than the discount rate you demanded, so it adds value.

Formula

NPV = −C₀ + Σ CFₜ / (1 + r)^t   for t = 1 to n

Variables

C₀initial investment at time zero
CFₜnet cash flow in period t
rdiscount rate (required return or cost of capital) per period
tperiod number

Worked example

Inputs: $100,000 upfront, then $30,000 per year for 5 years, discounted at 8%

Year 1: 30000 / 1.08 = 27,777.78
Year 2: 30000 / 1.08² = 25,720.16
Year 3: 30000 / 1.08³ = 23,814.97
Year 4: 30000 / 1.08⁴ = 22,050.90
Year 5: 30000 / 1.08⁵ = 20,417.50
Sum of discounted flows: 119,781.30
NPV = 119,781.30 − 100,000

Result: NPV = +$19,781.30, so the project clears an 8% hurdle

Notes

NPV is measured in currency, not percent, so it already reflects project scale. Ranking mutually exclusive projects by NPV beats ranking them by IRR.
The discount rate does most of the work. Moving from 8% to 12% in this example cuts NPV to about $8,143, so state the rate you assumed.
Spreadsheet NPV functions discount the first argument by one period. If your initial outlay sits at time zero, keep it outside the function and add it separately.
Use nominal cash flows with a nominal discount rate, or real (inflation-adjusted) flows with a real rate. Mixing the two is the most common modelling error here.

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Frequently Asked Questions

Yes. Npv Calculator costs nothing, needs no account, and runs right in your browser. There is no paywall, no watermark on the results, and no limit on how many times you can run the numbers.

Npv Calculator uses the standard formula for this kind of calculation, so the output is only as good as the figures you type in. Rates, fees, and rules in finance shift over time, and we review the underlying assumptions on a regular schedule; check the "Last reviewed" date above for the most recent pass. Spotted something off? There's a feedback button in the bottom-right corner.

Treat the output of Npv Calculator as a starting point, not final advice. Tax filings, loan approvals, insurance claims, property deals, and legal matters all depend on details a calculator cannot see: your full financial picture, local rules, and the specifics of your paperwork. Run the numbers here, then confirm anything consequential with an accountant, lawyer, or licensed advisor.

How it works

Formula

NPV = −C₀ + Σ CFₜ / (1 + r)^t   for t = 1 to n

Variables

C₀initial investment at time zero
CFₜnet cash flow in period t
rdiscount rate (required return or cost of capital) per period
tperiod number

Worked example

Inputs: $100,000 upfront, then $30,000 per year for 5 years, discounted at 8%

Year 1: 30000 / 1.08 = 27,777.78
Year 2: 30000 / 1.08² = 25,720.16
Year 3: 30000 / 1.08³ = 23,814.97
Year 4: 30000 / 1.08⁴ = 22,050.90
Year 5: 30000 / 1.08⁵ = 20,417.50
Sum of discounted flows: 119,781.30
NPV = 119,781.30 − 100,000

Result: NPV = +$19,781.30, so the project clears an 8% hurdle

Notes

NPV is measured in currency, not percent, so it already reflects project scale. Ranking mutually exclusive projects by NPV beats ranking them by IRR.
The discount rate does most of the work. Moving from 8% to 12% in this example cuts NPV to about $8,143, so state the rate you assumed.
Spreadsheet NPV functions discount the first argument by one period. If your initial outlay sits at time zero, keep it outside the function and add it separately.
Use nominal cash flows with a nominal discount rate, or real (inflation-adjusted) flows with a real rate. Mixing the two is the most common modelling error here.

NPV Calculator

Yearly Cash Flows

How it works

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NPV Calculator

Yearly Cash Flows

How it works

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Frequently Asked Questions