NPV Calculator – Net Present Value
Calculate the net present value of a series of cash flows at your chosen discount rate. Enter each period's cash flow and the discount rate. Positive NPV means the investment adds value. Free, no sign-up.
NPV Calculator
Calculate net present value of cash flows at a given discount rate. Positive NPV suggests the investment is worthwhile.
NPV formula
NPV = Σ (CF_t / (1 + r)^t)
CF_t = cash flow at period t, r = discount rate (decimal). Period 0 is typically the initial investment.
Understanding NPV and investment decisions
Net Present Value (NPV) is a fundamental tool in finance. It converts future cash flows into today's value by discounting them at a rate that reflects the time value of money and risk. A positive NPV means the investment is worth more than its cost at your required return; a negative NPV means it falls short.
The discount rate you choose is critical. It should reflect what you could earn on an alternative investment of similar risk. For a risk-free project, use a government bond yield. For equity-like risk, use a higher rate. The NPV rule: accept projects with NPV > 0, reject those with NPV < 0.
NPV is preferred over payback period because it accounts for all cash flows and the time value of money. It is more reliable than IRR when comparing mutually exclusive projects of different sizes. Use our NPV calculator with the IRR and present value calculators to build a complete analysis toolkit.