Npv Calculator
Calculate the Net Present Value (NPV) of a series of future cash flows to evaluate investment profitability.
Published by:
isCalculator Editorial Team
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How to use this tool?
How to Use the NPV Calculator
- Enter Initial Investment: Input the upfront cost (e.g., 10000). Use a negative number if it's an outflow, but the calculator subtracts it automatically.
- Enter Discount Rate: Input the annual discount rate as a percentage (e.g., 10 for 10%). Must be 0 or greater.
- Enter Cash Flows: Type future net cash inflows as comma-separated numbers (e.g., 3000,4000,5000,6000). No spaces needed.
- Calculate: Click the "Calculate NPV" button.
- Read Results: The NPV value appears in bold. Positive NPV suggests a good investment; negative suggests a loss. The step-by-step breakdown shows each year's present value calculation.
Note: All monetary values are in dollars. Cash flows are assumed to occur at the end of each year.
Previous Results
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Frequently Asked Questions
Net Present Value (NPV) is the difference between the present value of cash inflows and outflows over a period of time. It is used to analyze the profitability of an investment.
NPV = sum of (Cash Flow / (1 + discount rate)^period) minus initial investment. A positive NPV indicates a profitable investment.
A negative NPV suggests that the projected earnings (in present dollars) are less than the initial investment, indicating the investment may not be profitable.
