Net Present Value (NPV) Calculator

Calculate the net present value of an investment or project given expected cash flows and a discount rate.

Initial Investment

Discount Rate

Annual Cash Flows

Year 1

Year 2

Year 3

Year 4

Year 5

How to Use This Calculator

1. Enter the initial investment (as a positive number).

2. Enter your discount rate — often the weighted average cost of capital (WACC) or required return.

3. Enter expected cash flows for each year (can be negative for loss years).

Decision rule: NPV > 0 means the project adds value. NPV < 0 means it destroys value at your required rate of return.

Real-World Examples

$100k investment, 10% discount rate, $30k/yr for 5 years:
PV of cash flows = $113,724 − $100,000 = NPV: +$13,724 (invest!)

$50k investment, 12% rate, $10k, $15k, $20k, $15k, $10k:
PV = $46,500 − $50,000 = NPV: −$3,500 (don't invest)

Frequently Asked Questions

What discount rate should I use?

For business investments, use your WACC (typically 8–15%). For personal investments, use your required rate of return or opportunity cost (e.g., 7% if you'd otherwise invest in the S&P 500).

What's the difference between NPV and IRR?

NPV tells you the dollar value added in today's dollars. IRR tells you the implied rate of return. They usually agree on go/no-go decisions, but NPV is better for comparing projects of different sizes.

Can cash flows be negative?

Yes — some years may have negative cash flows (renovation costs, capex). Enter them as negative numbers.

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