NPV Calculator
Calculate the Net Present Value (NPV) of an investment by entering the discount rate, initial investment, and a series of expected future cash flows. A positive NPV indicates the investment is expected to generate value.
NPV Calculator
Enter future cash flows separated by commas, one per period (year).
FAQ
What is Net Present Value (NPV)?
NPV is the difference between the present value of future cash inflows and the initial investment outflow. It accounts for the time value of money by discounting future cash flows back to their present value using a specified discount rate.
What discount rate should I use?
The discount rate typically reflects the cost of capital or the minimum required rate of return. Common choices include the weighted average cost of capital (WACC), the opportunity cost of alternative investments, or a risk-adjusted rate.
How do I interpret NPV results?
A positive NPV means the investment is expected to add value and is generally considered worthwhile. A negative NPV means the investment would destroy value. When comparing projects, the one with the higher NPV is typically preferred.