NPV Calculator
Find the net present value of a list of cash flows at your discount rate. See each flow discounted, the profitability index, and the NPV profile chart that crosses zero at the IRR.
How to Use
- Choose Cash flow list for any pattern of flows, or Level cash flow for the same amount every year.
- Enter the money you put in first, as a negative number, then each later cash flow, one per line. In Level mode enter the cost, the yearly cash flow, the years and any value left at the end.
- Enter your discount rate: the return you could earn elsewhere at the same risk.
- Read the NPV. Positive means the flows are worth more than they cost at that rate; negative means they fall short.
- Use the NPV profile chart to see how the answer changes with the rate. The point where the curve crosses zero is the IRR.
Worked Example
A list of cash flows. A machine costs $10,000 today and saves $3,000, $3,500, $4,000 and $4,500 over the next four years. At a 10% discount rate each saving is divided by 1.1 once for every year it waits: 3,000 ÷ 1.1 = 2,727.27, 3,500 ÷ 1.12 = 2,892.56, 4,000 ÷ 1.13 = 3,005.26 and 4,500 ÷ 1.14 = 3,073.56. Together they are worth $11,698.65 today, so the NPV is 11,698.65 − 10,000 = $1,698.65.
A level cash flow. $50,000 buys equipment that saves $12,000 a year for six years and sells for $5,000 at the end. The savings are an annuity: 12,000 × (1 − 1.08−6) ÷ 0.08 = $55,474.56 at 8%. The resale adds 5,000 ÷ 1.086 = $3,150.85. NPV = 55,474.56 + 3,150.85 − 50,000 = $8,625.40.
The common mistake: running a spreadsheet’s =NPV(10%, −10000, 3000, 3500, 4000, 4500) over the whole column. The function discounts its first value too, as if the $10,000 were paid a year from now, and returns $1,544.23 — the right answer divided by 1.1. Write =−10000 + NPV(10%, 3000, 3500, 4000, 4500) to get $1,698.65.
Show Work
Formulas
From Interest Tables to Capital Budgeting
Discounting is far older than the term NPV. The Flemish mathematician Simon Stevin published tables of interest in 1582 so that merchants could find the present value of payments due in later years without long division. Irving Fisher turned the idea into a theory of investment in The Rate of Interest (1907) and The Theory of Interest (1930): a project is worth doing when the present value of what it returns exceeds its cost.
Joel Dean’s Capital Budgeting (1951) brought discounted cash flow into company practice. A 2001 survey of chief financial officers by John Graham and Campbell Harvey found NPV and IRR were the two most widely used tests for new investments, ahead of the payback period. NPV has one property the other measures lack: the values of separate projects simply add up, so it ranks choices by how much wealth each one creates.
About This Calculator
This is the focused NPV page: enter cash flows and a rate, and it shows the net present value, how each flow is discounted, the profitability index and the NPV profile. The IRR Calculator also works out NPV, and adds MIRR, XIRR for flows on real dates, and a full search for multiple IRRs — use it when the return itself is the question. Flows can be yearly, quarterly or monthly; the discount rate is a yearly effective rate converted to the period.
All calculations run in your browser; nothing you enter is sent to a server.
Estimates for planning and education — not financial, tax or legal advice.
Related tools: IRR Calculator, Payback Period Calculator, and Present Value Calculator.
Frequently Asked Questions
What does NPV tell me?
It is how much richer the project makes you in today’s money, after paying for the cash you tie up at your discount rate. A $10,000 machine saving $3,000, $3,500, $4,000 and $4,500 over four years has an NPV of $1,698.65 at 10%: the savings are worth $11,698.65 today, against the $10,000 cost.
How much does the discount rate matter?
A lot, and more for long projects. The same machine is worth $3,189.26 at 5%, $1,698.65 at 10%, $458.15 at 15% and −$584.49 at 20%. The NPV is exactly zero at 17.0937%, its IRR. Use the rate you could earn on something of similar risk, often the company’s cost of capital.
Why does my spreadsheet NPV give a different answer?
A spreadsheet’s NPV() function treats the first value in its range as arriving one period from now and discounts it. Putting the whole column in gives $1,544.23 for the machine, which is the right $1,698.65 divided by 1.1. Add the year-0 flow outside the function, or pick “One period from now” here to match the spreadsheet.
What is the profitability index?
The present value of the money coming back divided by the present value of the money going out. Above 1 means a positive NPV. The machine scores $11,698.65 ÷ $10,000 = 1.17, so each dollar invested returns $1.17 in today’s money. It helps rank projects when the budget is limited.
NPV and IRR disagree — which one should I trust?
NPV, for a choice between projects. Project A costs $10,000 and pays $12,000 after one year (IRR 20%, NPV $909.09 at 10%). Project B costs $10,000 and pays $16,000 after three years (IRR 16.96%, NPV $2,021.04 at 10%). IRR prefers A, but B adds more value at any rate below 15.47%, where the two NPV profiles cross.
How do I use the NPV Calculator?
Simply type your numbers and read the result, which refreshes the instant you change something. There is nothing to submit and nothing to wait for.
Does it cost anything or need an account?
No. The tool is completely free, there is no account to create, and it keeps working offline after the page first loads.
Is anything I type uploaded?
No. The tool works entirely on your device, so the values you enter never leave your browser.
Common Use Cases
Buying equipment
A $10,000 machine saving $3,000 to $4,500 a year for four years has an NPV of $1,698.65 at a 10% cost of capital.
Level savings with a resale value
Spending $50,000 to save $12,000 a year for six years, then selling for $5,000, is worth $8,625.40 at 8%.
Rental property
$100,000 in, $6,000 of rent for five years and a $120,000 sale has an NPV of $10,159.53 at 7%.
Spotting a bad deal
$25,000 for $5,000 a year over six years looks like a $5,000 profit, but at 12% the NPV is −$4,442.96.
Monthly cash flows
$5,000 in and $450 back each month for a year has an NPV of $130.22 at 10% a year.
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