What is Net Present Value (NPV)?

NPV is the sum of all future cash flows discounted back to their present value, minus the initial investment. A positive NPV means the investment is expected to generate more value than its cost; a negative NPV means it destroys value at the given discount rate.

What discount rate should I use?

The discount rate represents the opportunity cost of capital — typically the weighted average cost of capital (WACC) for a business, or the required rate of return for an investor. Common values range from 5% to 15% for typical corporate projects.

How is NPV different from IRR?

NPV gives the dollar value added at a specific discount rate. IRR (Internal Rate of Return) is the discount rate at which NPV equals zero. Both are used together: a project is attractive when NPV > 0 and IRR > the discount rate.

What does a negative NPV mean?

A negative NPV means the investment is expected to lose value in present-value terms at the given discount rate. It does not necessarily mean the project loses money in absolute terms — only that the returns do not meet the required rate of return.

Can I enter negative cash flows for individual periods?

Yes. Enter negative values for periods where you expect net outflows (additional capital expenditures, maintenance costs, etc.) and positive values for periods with net inflows. The calculator handles mixed cash flow streams correctly.

NPV Calculator

Name: NPV Calculator
Availability: InStock
Author: Nham Vu

Enter a discount rate and up to 20 future cash flows to instantly calculate net present value and see the discounted value of each period.

Cash Flow Inputs

Discount Rate (%)

Cash Flows by Period Period 0 = initial investment

Enter a discount rate and cash flows, then click Calculate.

Net Present Value

$0.00

Discount Rate

10%

Total Cash Flows

Periods

Period-by-Period Breakdown

Period	Cash Flow	Discount Factor	PV	Cumulative NPV

Cumulative NPV Over Time

Summary

Enter a discount rate and up to 20 future cash flows to instantly calculate net present value and see the discounted value of each period.

How it works

Enter the discount rate (cost of capital) as a percentage.
Optionally enter the initial investment as a negative cash flow in Period 0.
Add cash flows for each period using the "Add Period" button.
Enter positive values for inflows and negative values for outflows.
Read the NPV, total undiscounted cash flows, and period-by-period breakdown in the results panel.
Use the chart to visualize cumulative NPV over time.

Use cases

Evaluating whether a capital investment will generate positive returns.
Comparing multiple projects by their net present value.
Calculating the present value of a series of rental income payments.
Valuing a business acquisition based on projected future cash flows.
Performing discounted cash flow (DCF) analysis for financial modeling.
Assessing the viability of a loan or bond investment.

Frequently Asked Questions

Last updated: 2026-07-01 · Reviewed by Nham Vu