Net Present Value (NPV) Calculator
Discount an investment's future cash flows to today's dollars and see if it clears your required return.
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About the Net Present Value (NPV) Calculator
Discounts a series of future cash flows back to today's dollars using a chosen discount rate, then compares that total against the upfront investment to compute Net Present Value — a core capital-budgeting decision tool.
- Enter the Initial investment (upfront cash outflow).
- Enter the Discount rate — your required return or cost of capital, per period.
- Enter each year's expected net cash flow.
- Read the NPV, the accept/reject verdict at this rate, and the year-by-year discounting table.
A $50,000 initial investment expected to return $15,000/year for 5 years, discounted at an 8% required rate: the 5 discounted cash flows sum to about $59,891.56, giving an NPV of about $9,891.56 — positive, so the verdict is Accept.
Assumes regular, equal-length periods and a single, constant discount rate across the whole horizon. Doesn't do irregular-date discounting (XNPV) or model a term structure of rates that varies by year.
- • NPV is the more reliable ranking tool than IRR when comparing mutually exclusive projects of different sizes.
- • The discount rate you choose matters enormously — a project with most of its payoff far in the future is far more rate-sensitive than one that pays back quickly.
- • An NPV of exactly $0 at your chosen rate means that rate IS the investment's internal rate of return (IRR).
Illustrative estimate only, not financial or tax advice. Verify figures with a licensed adviser or your local tax authority.