NPV Calculator
Values an investment by discounting its future cash flows.
Net present value
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Profitability index —
Present value of cash flows —
Reading this —
The formula
NPV = Σ cash flow ÷ (1 + r)^t − investment PI = PV of cash flows ÷ investment
Future money is discounted to today. A positive NPV means it earns more than the discount rate.
What to watch out for
Cash flows are assumed to arrive at year end. Enter a negative number for a year with a cost.
Frequently Asked Questions
What does a positive NPV mean?
It earns more than the discount rate. 10,000 returning 3,000 a year for 5 years at 8% has an NPV of 1,978.13.