NPV calculator – net present value
Discount future project cash flows and measure value creation after the initial investment.
This choice applies to every calculator; amounts are not converted.
Net present value
Enter the initial investment, one cash flow per period and the discount rate.
One amount per line. Negative values are allowed.
Discounted cash-flow detail
| Period | Cash flow | Discounted cash flow | Cumulative NPV |
|---|
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How does this tool work?
NPV discounts each future cash flow so its value today can be compared with the initial investment.
The calculation starts with the initial investment as a cash outflow at the beginning of the project, then discounts every future cash flow using the selected rate and its period number. A distant cash flow is therefore discounted more heavily than a near one. The present values are added together and the initial investment is subtracted. A positive NPV means discounted inflows exceed the capital committed under the entered assumptions, while a negative NPV means the opposite. The result depends directly on the chosen rate and cash flows.
How to use this tool
Enter the investment
Provide the amount committed at the start.
Add cash flows
Enter one future cash flow per period.
Choose the rate
Set the discount rate and review NPV.
Good to know
Choosing the discount rate
The rate reflects the return you require for this level of risk: often the company’s weighted average cost of capital, increased for a riskier project. An NPV positive at 5% can turn negative at 10%: test several rates.
End-of-period cash flows
The tool discounts each flow as if it arrived at the end of its period, and the initial investment is not discounted. If your income tends to arrive at the start of each period, the real NPV is slightly higher than the result shown.
Net present value formula
Net present value
NPV = −I₀ + Σ CFₜ / (1 + r)ᵗ, for t = 1 to n
The initial investment is paid at t = 0; each cash flow entered is discounted at the end of its period, the first line being t = 1.
- I₀
- initial investment, paid at t = 0
- CFₜ
- cash flow of period t
- r
- discount rate per period, as a decimal
- n
- number of periods entered
Use cases
Compare projects
Compare several investments using the same reference rate and consistent cash-flow assumptions.
Test a scenario
Measure how a higher discount rate or more cautious future cash flows affect estimated value creation.
Support a decision
Use NPV as one complementary indicator before an investment or financing decision.
Examples
€10,000 project discounted at 8%
3,000/1.08 + 4,000/1.08² + 5,000/1.08³ = €10,176.29; minus the €10,000 invested, NPV is €176.29: the project creates a little value at this rate.
Input
Initial investment: €10,000; Future cash flows: €3,000, €4,000, €5,000; Discount rate: 8%Result
NPV: €176.29; Present value of future cash flows: €10,176.29Tips and best practices
- A positive NPV indicates value creation at the selected rate.
- Use a discount rate consistent with risk and cost of capital.
- Compare projects using consistent cash-flow assumptions.
Sources and references
Frequently asked questions
What does a positive NPV mean?
The present value of future cash flows exceeds the initial investment at the selected rate, indicating value creation under the assumptions entered.
Why discount cash flows?
Because money received in the future is not worth the same as money available today, so discounting puts flows on a comparable basis.
Can cash flows be negative?
Yes, for future expenses, reinvestment needs, or any other expected cash outflow during the project.
Which discount rate should I use for NPV?
Use a rate consistent with the cost of capital, risk and cash-flow periods. NPV is sensitive to this assumption.
What does an NPV of zero mean?
The project earns exactly the chosen discount rate: it recovers the investment and pays the capital at that rate, without creating extra value. The rate that makes NPV equal to zero is precisely the project’s IRR.
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