Finance tools
Net present value NPV calculator
Free net present value calculator for capital budgeting and project evaluation. Enter initial investment, discount rate, and yearly cash flows (even or uneven) to get NPV, accept/reject verdict, cumulative chart, and a step-by-step present value schedule. Model a 5-year NPV or long-horizon cash flow stream — live results, no submit button.
What is net present value (NPV)?
Net present value (NPV) is the difference between the present value of future cash inflows and the initial investment outlay. It answers whether a project adds value after accounting for the time value of money — money earned later is worth less than money today.
If NPV > 0, the project is expected to earn more than your required return (accept). If NPV < 0, reject. A net present value calculator discounts each future cash flow, sums present values, and subtracts the upfront cost so you do not have to build the spreadsheet by hand. Results are illustrative for planning and education, not investment advice.
Even annual cash flows
Constant or growing yearly returns with a required discount rate.
Uneven yearly flows
Per-year cash flows up to 30 years for project-specific forecasts.
PV schedule + chart
Discount factors, present values, and cumulative NPV over time.
CSV/PDF export
Download inputs and NPV schedule for Excel or reports.
Related tools: present value calculator, payback period calculator, WACC calculator, break-even calculator, inflation calculator, and future value calculator (full 5-mode TVM — not project NPV).
NPV formula
The NPV formula discounts each future cash flow to today and subtracts the initial investment:
Net present value
NPV = Σ (Cash flowₜ ÷ (1 + r)ᵗ) − Initial investment
Worked example (machinery lease): $500,000 investment, 6% discount rate, cash flows $210,000 / $237,000 / $265,000 in Years 1–3 → NPV ≈ $131,541 (positive — project adds value at 6%).
5-year even example: $100,000 investment, 10% discount rate, $30,000 per year for five years → sum of discounted inflows ≈ $113,724, so NPV ≈ $13,724 (positive). Use even annual cash flows mode above to reproduce this textbook case.
Each cash flow in Year t is divided by (1 + r) raised to the power t because money received later is worth less today.
NPV calculator example with cash flows
Most real projects use uneven yearly cash flows — inflows rise as operations ramp up or taper near end of life. This NPV calculator with cash flows handles per-year entries (up to 30 years) and shows each period’s discount factor, present value, and cumulative NPV.
10-year uneven cash flow example
$200,000 initial investment, 4% discount rate, Years 1–5: $50,000 each, Years 6–10: $45,000 each (end-of-year timing).
NPV ≈ $187,249 — positive at a 4% hurdle rate. Switch to uneven yearly mode and use the machinery or custom rows to match your forecast.
Tip: open the present value schedule below the chart to audit each row — useful when you compare against Excel =NPV() or a finance textbook solution.
How to calculate NPV step by step
Enter investment and cash flows
Type the initial outlay (Year 0) and either even annual inflows or uneven yearly cash flows for each project year.
Set your discount rate
Enter the hurdle rate, WACC, or required return — the rate used to discount future cash flows to today.
Read NPV and the schedule
Review net present value, accept/reject verdict, cumulative chart, and the present value schedule — export CSV or PDF if needed.
Manual calculation (5 years): discount each inflow separately, then subtract the investment. Example — $100,000 outlay, 10% rate, $30,000 in Years 1–5:
- Year 1 PV: $30,000 ÷ 1.10 = $27,273
- Year 2 PV: $30,000 ÷ 1.10² = $24,793
- Year 3 PV: $30,000 ÷ 1.10³ = $22,539
- Year 4 PV: $30,000 ÷ 1.10⁴ = $20,479
- Year 5 PV: $30,000 ÷ 1.10⁵ = $18,618
Sum of PVs ≈ $113,724 − $100,000 investment = NPV ≈ $13,724. The calculator above performs these steps instantly for any cash flow pattern.
NPV vs IRR vs payback period
Payback period measures when cumulative cash recovers the investment — fast screen, ignores post-recovery flows. NPV values all discounted cash flows. IRR is the discount rate where NPV equals zero.
Use payback for timing risk, NPV for accept/reject on value, and IRR for comparing returns across projects (dedicated IRR calculator on the roadmap).
How to calculate NPV in Excel
Excel’s =NPV(rate, value1, value2, …) discounts future cash flows but excludes Year 0. Add the initial outflow separately:
=NPV(6%, B2:B4) + B1 where B1 is the negative initial investment and B2:B4 are future inflows.
5-year even example in Excel: put -100000 in B1, 30000 in B2:B6, then =NPV(10%, B2:B6)+B1 → NPV ≈ $13,724. Google Sheets uses the same =NPV() syntax.
Export the schedule from this calculator to verify your spreadsheet row by row — especially for uneven cash flows where a single range is easier to mistype.
Choosing a discount rate
The discount rate reflects your minimum acceptable return and project risk. Common choices: company WACC, cost of capital, or opportunity cost of funds. Typical planning rates range from 5%–15% depending on risk — use the same rate across NPV, payback, and IRR models for consistency.
Estimate WACC with our WACC calculator before running NPV on long-horizon projects. For terminal value as a growing perpetuity after the forecast (TV = FCFF ÷ (WACC − g)), sanity-check the Gordon math with our perpetuity calculator.
More free tools
Discover more calculators for time tracking, payroll, and HR.
Frequently asked questions about this NPV calculator
How do I calculate NPV?
Discount each future cash flow to present value using PV = CF ÷ (1 + r)ᵗ, sum the present values, and subtract the initial investment. Enter flows and discount rate in this calculator for live NPV and a full schedule.
How do you calculate NPV for 5 years?
List the initial investment (Year 0) and each of the five yearly cash inflows. Discount each inflow: PV = CF ÷ (1 + r)ᵗ for t = 1…5, sum the present values, and subtract the investment.
Example: $100,000 investment, 10% rate, $30,000 per year → NPV ≈ $13,724. Use even annual cash flows with projection years set to 5, or enter five rows in uneven mode.
How do you manually calculate NPV?
Build a table with Year 0 outflow and Years 1–N inflows. For each future year, compute present value = cash flow ÷ (1 + discount rate)ᵗ. Add the present values and subtract the initial investment.
NPV is positive when discounted inflows exceed the upfront cost. This calculator shows discount factors and cumulative NPV in the schedule so you can check each step against pen-and-paper or Excel.
What is a good NPV?
Positive NPV means the project beats your discount rate — generally accept. Zero NPV breaks even at the hurdle rate. Negative NPV destroys value at that rate — reject or revise assumptions.
What is the NPV formula?
NPV = Σ (Cash flowₜ ÷ (1 + r)ᵗ) − Initial investment, where r is the discount rate and t is the year. See the formula section above for a worked machinery example.
How do I calculate NPV in Excel?
Use =NPV(rate, range_of_future_flows) + initial_outflow. Excel’s NPV function skips Year 0 — include the initial investment as a separate negative term.
What is the difference between NPV and IRR?
NPV is a dollar value at a chosen discount rate. IRR is the rate that makes NPV zero. NPV is usually preferred when comparing projects of different size; IRR helps express return as a percentage.
How do NPV, IRR, and payback period work together?
Payback screens recovery timing; NPV measures total value; IRR expresses breakeven return. Use all three for capital budgeting — start with our payback period calculator and this NPV tool.
Can you calculate NPV with monthly cash flows?
Yes in principle — use monthly flows and a monthly discount rate. This tool uses annual periods in v1. Approximate by dividing annual flows by 12 or export the schedule and rescale in Excel.
What discount rate should I use?
Use WACC, required return on capital, or a risk-adjusted hurdle rate consistent with your other models. Estimate WACC with our WACC calculator.
What is NPV in simple words?
NPV tells you how much a project is worth today after accounting for the fact that future money is worth less than money now. Positive NPV means the investment is expected to be profitable at your required return.
What is an example of NPV calculation?
A company invests $500,000 in equipment with expected cash flows of $210,000, $237,000, and $265,000 over three years at a 6% discount rate. Discounted inflows exceed the cost → NPV ≈ $131,541 (accept).
For uneven 10-year forecasts, see the cash flow example section above ($200,000 investment → NPV ≈ $187,249 at 4%).
What is the present value of $100,000 at 12% for 20 years?
That is a single lump-sum time-value-of-money question, not a multi-year NPV project with separate cash flows. Present value of one future amount: PV = FV ÷ (1 + r)ᵗ — $100,000 ÷ (1.12)²⁰ ≈ $10,366.68 today.
Use our present value calculator for lump-sum and annuity PV. Use this NPV calculator when you have an initial investment plus a series of yearly inflows or outflows.
How do you calculate NPV with inflation?
Use real cash flows with a real discount rate, or nominal flows with a nominal rate that includes inflation — do not mix real flows with a nominal hurdle rate.
Rough shortcut: if inflation is expected at 3% and your nominal required return is 10%, a real discount rate is about 7% (Fisher approximation). Model rising nominal inflows in uneven yearly mode, or estimate purchasing-power erosion with our inflation calculator.
What is the present value of a perpetuity in DCF?
After the explicit forecast, terminal value often assumes cash flows grow at g forever: PV = CF ÷ (r − g) (Gordon growth model). That is a growing perpetuity, not a finite NPV schedule.
This NPV calculator sums finite yearly flows plus initial investment. To isolate perpetuity PV for preferred dividends, consols, or terminal-value checks, use our perpetuity calculator.
Is this NPV calculator free?
Yes. Even and uneven modes, present value schedule, chart, and CSV/PDF export are free with no sign-up.