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NPV Calculator

Net present value

Calculate Net Present Value (NPV) of a project or investment with discounted future cash flows, profitability index, and payback period.

Project

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How It Works

The Formula

NPV = Σ CFₜ / (1 + r)ᵗ − Initial

CFₜ = cash flow in year t · r = discount rate

Worked Example

$10,000 now · +$4,000/yr for 3 yrs · 8%

  1. 1NPV = 4000/1.08 + 4000/1.1664 + 4000/1.2597 − 10000
  2. 2NPV ≈ 3704 + 3429 + 3175 − 10000

Result: ≈ +$308 — accept the project

Pro Tip

Positive NPV = value created. Negative = value destroyed.

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