MihsabaShare this free calculator
Send this tool to someone who needs the calculation.
How to use
This NPV calculator discounts each periodic cash flow back to time 0 using the rate you enter. It is a present-value discount calculation for a series of cash flows: enter negative values for outflows and positive values for inflows. For one future lump sum only, the separate Present Value Calculator is the simpler tool.
- Enter the discount rate per period; it must be greater than -100%.
- Enter CF0 followed by CF1, CF2… separated by commas or lines.
- Calculate NPV and the present value of future cash flows.
How it is calculated
Example
Example: enter CF0=−1000, followed by 400 at the end of each of three periods, with a 10% discount rate per period. Discounted inflows are 400÷1.1+400÷1.1²+400÷1.1³≈994.74, so NPV≈−1000+994.74=−5.26. Under these assumptions, NPV is slightly negative.
Important notes
This is a mathematical estimate, not investment advice. The discount-rate period must match the cash-flow period.
Worked examples and interpreting results
Consider a numerical example with −1000 at time zero, then 600 at the end of each of two periods. Discount the future cash flows at 10% per period; the initial flow is not discounted because it occurs now.
| Case | Calculation | Result |
|---|---|---|
| Net present value at 10% | −1000 + 600 ÷ 1.1 + 600 ÷ 1.1² | 41.322314 |
| Undiscounted sum at a 0% rate | −1000 + 600 + 600 | 200 |
How to check the result
Periods in this calculator have equal length. Monthly cash flows need a monthly discount rate. The example explains the formula and does not assume that projected cash flows are guaranteed.
Net present value (NPV) formula and examples
NPV discounts each future cash flow back to today and subtracts the initial investment. Divide the first year's flow by 1+r, the second by (1+r)², and continue for later years.
- Initial 1000 and two annual 600 inflows: −1000 + 600÷1.10 + 600÷1.10² = ≈ 41.32
- Initial 500 and one 550 inflow: −500 + 550÷1.10 = 0
- Initial 1000 and one 1100 inflow: −1000 + 1100÷1.10 = 0
Calculation caveat
A positive NPV is not a guaranteed return. Results depend on estimated future cash flows and the discount rate, both of which involve uncertainty.
Related calculators
Frequently asked questions
Is CF0 discounted?
No. CF0 is at time 0, so its discount factor is 1.
Can I use this as a present value discount calculator?
Yes for a series of equally spaced cash flows. Each future cash flow is discounted to time 0, then the discounted values are summed with CF0. For a single future amount, use the Present Value Calculator.
Is this XNPV?
No. This calculator assumes equally spaced periods; irregular dates require an XNPV-style calculation.
How should NPV be interpreted?
Under the entered assumptions, a positive NPV means discounted inflows exceed the investment and discounted outflows at the selected rate. The result is highly sensitive to cash-flow and discount-rate assumptions.