NPV Calculator
Calculate the Net Present Value of a series of cash flows using a chosen discount rate.
Cash Flows (per year)
How the NPV Calculator Works
Net Present Value is a financial method used to evaluate investment profitability. It calculates the current value of future cash flows by discounting them using a selected rate. The formula adjusts future earnings to reflect their value in today's money.
The tool takes your expected cash flow for each year and applies the discount rate using the formula: PV = Cash Flow / (1 + r)^n. By summing all discounted cash flows, the calculator produces the Net Present Value.
A higher discount rate lowers the NPV because future money is worth less. A positive NPV indicates a profitable investment.
Frequently Asked Questions
What is Net Present Value?
NPV is a method to determine the value of future cash flows in today's money using a discount rate.
What does a positive NPV mean?
A positive NPV indicates that the investment is expected to generate more value than it costs, making it financially attractive.
Why do we use a discount rate?
The discount rate accounts for inflation, opportunity cost, and the risk of the investment. It adjusts future cash flows to present value.
Is my data stored?
No. All calculations happen locally in your browser.