Enter an initial investment, a discount rate, and each year's expected cash flow to calculate net present value.

How to Use the Net Present Value Calculator

Enter the initial investment and a discount rate, set the number of years (this shows or hides that many cash-flow rows below), then fill in each year's expected cash flow.

NPV answers one question: after discounting every future dollar back to today and subtracting what you put in up front, are you actually ahead? A project can throw off impressive-looking cash flows for years and still post a negative NPV if the discount rate is high enough — the rate is doing more work here than most people assume.

The Formula

NPV = −Initial Investment + Σ [CFₜ ÷ (1 + r)ᵗ]  for t = 1 to n

Each year's cash flow gets discounted by (1 + r) raised to that year's own power — year one is discounted once, year five five times — then the initial outflow is subtracted from the sum. r is the discount rate as a decimal.

Reading the Result

A positive NPV means the discounted inflows outweigh what went in; a negative one means they don't, at this particular rate. Neither number is a recommendation — it's a description of what the entered assumptions produce, and the page states it that way rather than telling you what to do with it. Change the discount rate and watch how sensitive the result is: NPV calculations built on optimistic cash-flow projections and an arbitrarily low discount rate can make almost anything look attractive on paper.

The Rate Is the Argument

Two analysts can plug in identical cash flows and land on opposite conclusions purely because they picked different discount rates — one using a company's cost of capital, another using a more conservative hurdle rate. There's no universally "correct" rate baked into this tool; it's left fully editable because the right number depends entirely on what you're comparing the investment against.

Put a $50,000 outlay against five years of $15,000 at an 8% discount rate and NPV lands around $9,891 — worth doing, on paper. Push the discount rate to 12% with the same cash flows and it drops to roughly $4,072; keep pushing past about 15.2% and it flips negative, because at that point the project's own rate of return — its internal rate of return, which this site has a separate calculator for — has been overtaken by what you're demanding in return for tying up the money.

NPV Doesn't Know About Risk, Timing Certainty, or Anything Else

It only knows the numbers you typed in. A cash flow projected five years out that never actually arrives, or arrives a year late, changes the real answer without changing anything this calculator can see — which is exactly why the same technique gets paired with sensitivity analysis and scenario testing in practice rather than trusted as a single definitive figure.