NPV Calculator
Enter an initial investment (as a negative number) and each period's cash flow to find the net present value.
How This Works
NPV discounts every future cash flow back to today's value at your chosen discount rate, then sums them (including the negative initial investment). A positive NPV means the investment is expected to add value at that discount rate.
Formula
Example
An initial $10,000 investment returning $3,000, $4,000, $4,000, $3,000 and $2,000 over 5 years has an NPV of about $2,329.20 at 10%, and an IRR of about 19.25%.
Frequently Asked Questions
What does a positive NPV mean?
A positive NPV means the investment is expected to generate more value than the discount rate requires — generally a good sign. A negative NPV suggests the investment underperforms that required rate.
How is IRR different from NPV?
NPV gives a dollar value at a chosen discount rate. IRR gives a percentage rate — the discount rate at which NPV would be exactly zero — making it easier to compare against a required rate of return.