NPV Calculator

Calculate the net present value of an investment using discount rate and projected cash flows.

Discount Rate (%)

Initial Investment ($)

Year 1 Cash Flow ($)

Year 2 Cash Flow ($)

Year 3 Cash Flow ($)

Year 4 Cash Flow ($)

Year 5 Cash Flow ($)

Use Cases

Evaluate capital investment projects
Compare business opportunities
Make investment decisions

Frequently Asked Questions

What does a positive NPV mean?

Positive NPV means the investment is expected to generate more value than its cost, considering the time value of money.

What discount rate should I use?

Use your cost of capital or required rate of return. Often 8-15% depending on risk.

What happens to NPV if I use a higher discount rate than expected?

A higher discount rate reduces the present value of future cash flows, making NPV lower. Projects become less attractive when the required rate of return increases.

How does NPV compare with IRR for making investment decisions between projects?

NPV gives the actual dollar value added, while IRR shows the percentage return. For mutually exclusive projects, NPV is generally preferred over IRR for final decisions.

Related Calculators

IRR Calculator CAGR Calculator Present Value Calculator

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Disclaimer:

This calculator provides estimates only. Actual loan payments, APR, interest, fees, taxes and terms may vary by lender, country, credit profile and market conditions. Verify with a qualified financial professional or lender.