Finance calculator

NPV Calculator for Cash Flows

Calculate net present value from an initial investment, discount rate, and up to five yearly cash flows.

FormulaNPV = sum(cash flow in year t / (1 + discount rate)^t) - initial investment

Formula

Net present value

NPV depends heavily on forecast cash flows and discount rate assumptions.

NPV = sum(cash flow in year t / (1 + discount rate)^t) - initial investment

Discount future cash flows to today, then subtract the upfront investment.

FAQ6 common questions for this calculator.

FAQs

What does a positive NPV mean?+

A positive NPV means the discounted cash inflows exceed the entered initial investment.

Can cash flows be negative?+

Yes. Enter a negative cash flow for a year with expected outflow.

How does the NPV Calculator calculate the result?+

For the NPV Calculator, it uses the Net present value: NPV = sum(cash flow in year t / (1 + discount rate)^t) - initial investment. Discount future cash flows to today, then subtract the upfront investment.

What information do I need to use the NPV Calculator?+

For the NPV Calculator, enter an initial investment, discount rate, and up to five yearly cash flows. Keep the units consistent with the calculator fields and compare your setup with the worked example on the page.

How accurate is the NPV Calculator?+

NPV Calculator is accurate for the rates, amounts, dates, and rules entered. It uses the Net present value shown on this page. Real products can differ because of fees, taxes, contract terms, or changing official thresholds.

What should I check before using the NPV Calculator result?+

For the NPV Calculator, check an initial investment, discount rate, and up to five yearly cash flows, then compare the Net present value and worked example with the contract or source you will rely on. Fees, tax year, currency, and payment timing can change the final decision.

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Finance guide

How to use the NPV Calculator

Calculate net present value from an initial investment, discount rate, and up to five yearly cash flows. The page also explains the net present value and shows a practical example: Discount future cash flows to today, then subtract the upfront investment.

  1. 1

    Enter your details

    Enter an initial investment, discount rate, and up to five yearly cash flows, then complete any other fields shown in the calculator.

  2. 2

    Check the calculation

    Review the result alongside the net present value: NPV = sum(cash flow in year t / (1 + discount rate)^t) - initial investment.

  3. 3

    Compare scenarios

    Change one or more inputs to see how they affect the NPV Calculator result before you use the estimate.