NPV Calculator
Find the net present value of an investment from its upfront cost and future yearly cash flows.
Net present value
1,307.29
- Present value of future cash flows
- 11,307.29
- Verdict
- Earns more than the discount rate
The initial investment happens today and is not discounted. (Excel's NPV() discounts its first value too — add the initial cost outside NPV() to match.)
Discounted cash flows
| Period | Cash flow | Present value |
|---|---|---|
| 0 | -10,000.00 | -10,000.00 |
| 1 | 3,000.00 | 2,727.27 |
| 2 | 4,200.00 | 3,471.07 |
| 3 | 6,800.00 | 5,108.94 |
Show the work
Discount each future cash flow to today
PV = Σ CFt ÷ (1 + r) to the power of t
3,000.00 ÷ 1.1 to the power of 1 + 4,200.00 ÷ 1.1 to the power of 2 + 6,800.00 ÷ 1.1 to the power of 3 = 11,307.29
Subtract the initial investment (paid today, not discounted)
NPV = PV of future cash flows − initial investment
11,307.29 − 10,000.00 = 1,307.29
Estimates for general information only — not financial advice.
How it works
NPV = −initial investment + Σ CFₜ ÷ (1 + r)^t for t = 1 … n
Questions
- How does the NPV calculator work?
- NPV = −initial investment + Σ CFₜ ÷ (1 + r)^t for t = 1 … n.
- What do I need to enter?
- Discount rate, Initial investment (today), Cash flows, one per period. Optional fields can be left blank.
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