What is NPV?
Net present value is the present value of future cash flows minus the initial investment.
NPV Calculator
Discount future cash flows and subtract (or add) the initial outlay to see if a project creates value.
Enter investment, cash flows, and rate
Initial investment is usually positive as an outflow. List yearly cash flows separated by commas.
About this calculator
How to use NPV Calculator, plus the formulas and logic behind the results.
Tool description
Net present value sums the present values of expected cash flows and subtracts the initial investment. A positive NPV suggests the project earns more than the discount rate.
How to use
- Enter the initial investment (cash outlay at time 0).
- List future cash flows in order, one per year, separated by commas.
- Enter the annual discount rate as a percent.
- Select Calculate to view NPV and the sum of discounted cash flows.
Formulas & reference
PV of CFₜ = CFₜ ÷ (1 + r)ᵗNPV = −Initial + Σ PV of CFₜr = discount rate ÷ 100
NPV checklist
- Positive NPV → value above the hurdle rate
- Negative NPV → below the required return
- Cash flows can be negative (additional outlays)
- Choose r to reflect opportunity cost of capital
Calculation logic
Each cash flow is discounted by year index starting at 1. The initial investment is subtracted from the sum of present values.
Educational model assumes end-of-year cash flows and a constant discount rate. Timing and risk may differ in practice.
NPV Calculator FAQ
Common questions about the calculation and how to interpret the estimate.
How are cash flows entered?
Enter year-1, year-2, … amounts separated by commas or spaces.
What discount rate should I use?
Often a WACC or required return that reflects risk—this tool does not choose it for you.
Is the initial investment discounted?
No. It is treated as a time-0 outflow and subtracted in full.
Can cash flows be negative?
Yes. Negative entries represent outflows in that year.
Is a zero NPV good?
It means the project earns exactly the discount rate under your assumptions.