How we calculate this
See methodology- Discount each yearly cash flow back to present value using the discount rate.
- Add all discounted cash flows together.
- Subtract the initial investment to estimate NPV.
NPV Calculator
NPV Calculator
Estimate net present value from an investment, discount rate, and projected cash flows.
Formula
NPV
Σ (Cash flow ÷ (1 + Discount rate)^Year) - Initial investment Worked example
If you invest $10,000 today and expect five yearly cash flows at a 10% discount rate, NPV estimates whether the future value clears the upfront cost.
- Discount each yearly cash flow by year using the 10% rate.
- Add the discounted cash flows together.
- Subtract the initial investment to get the final NPV.
Frequently Asked Questions
What does a positive NPV mean?
A positive NPV suggests the projected cash flows exceed the discount-adjusted cost of the investment.
What discount rate should I use?
Use a rate that reflects your required return, financing cost, or opportunity cost. This tool does not choose it for you.
Is this calculator financial advice?
No. It is a simple educational estimate and should not replace professional financial or accounting advice.
Methodology and Trust Note
See full methodologyThese tools are designed to make the math visible, keep assumptions clear, and give you a practical planning result you can review quickly.
This calculator is for educational and planning purposes only. It does not replace professional financial, tax, accounting, or business advice.