Example 1
- Initial investment: 10,000
- Discount rate: 8%
- Cash flows (years 1-4): 3,000 / 3,500 / 4,000 / 4,500
NPV ≈ 2,261.43
Undiscounted sum ≈ 5,000.00
PI > 1
What is NPV at 10,000, 8%, and inflows 3,000–4,500? About 2,261.43; PI > 1.
NPV Calculator
The net present value calculator discounts each cash flow back to today and adds them up. With 10,000 up front, 8%, and inflows of 3,000, 3,500, 4,000, and 4,500, NPV is about 2,261.43. You can add a second rate, a terminal value, and a table of discounted years.
Result
Initial investment / cost (enter as a positive number), Annual discount rate A (%), Annual discount rate B (%) and Terminal / salvage value. The result shows up here.
NPV = sum of CF_t ÷ (1+r)^t. The 10000 at 8% example is about 2261. The rate that drives NPV to 0 is on IRR.
How results are calculated
CF₀−10,000
r8%
CF₁…₄3k–4.5k
NPV≈ 2,261.43
Article hook: at 8% the same series yields about 2,261 NPV, and at 12% clearly less — the rate in the denominator weights the years. Clear CF₀ and year 1…N rows help you not mix outflow with inflow. An estimate at a flat rate, not a project verdict.
NPV, net present value, is the sum of cash flows pulled back to today: each year t is divided by (1+r)^t. You enter the initial investment as positive and the model places it in year 0 as an outflow. Rate A is the headline discount rate. A positive NPV at 8% means the series creates value above that hurdle. PI, discounted inflows divided by the value of outflows, usually sits above 1 together with a positive NPV.
First example: 10000, 8%, four inflows 3000, 3500, 4000, 4500. NPV about 2261.43, undiscounted sum 5000, PI above 1. Second: 50000, 10%, five times 12000 and a 5000 terminal value. NPV about −1405.95. Third: 20000, 12%, and 5000 / 5000 / 5000 / 2000 yield about −6719.81.
Enter Initial investment as a positive number and Annual discount rate A (%). Add year rows with the button. Rate B, terminal value, and the table sit behind toggles. Click Calculate and read NPV at A first. A single future amount with no series is simpler on the PV page.
IRR on the same first series is about 17.09%. CAGR and rate of return do not read yearly flows. FV goes from today forward, without discounting a series.
The result does not know risk or a changing rate. 2261 at 8% is not an investment decision, only the sum of discounted entries. Terminal value joins the last year before discounting, not as a separate magic bonus.
Type 10000, 8, and four years 3000, 3500, 4000, 4500. Check about 2261. Then raise the rate to 12% from the third example to see the minus.
">NPV, net present value, is the sum of cash flows pulled back to today: each year t is divided by (1+r)^t. You enter the initial investment as positive and the model places it in year 0 as an outflow. Rate A is the headline discount rate. A positive NPV at 8% means the series creates value above that hurdle. PI, discounted inflows divided by the value of outflows, usually sits above 1 together with a positive NPV.
First example: 10000, 8%, four inflows 3000, 3500, 4000, 4500. NPV about 2261.43, undiscounted sum 5000, PI above 1. Second: 50000, 10%, five times 12000 and a 5000 terminal value. NPV about −1405.95. Third: 20000, 12%, and 5000 / 5000 / 5000 / 2000 yield about −6719.81.
Enter Initial investment as a positive number and Annual discount rate A (%). Add year rows with the button. Rate B, terminal value, and the table sit behind toggles. Click Calculate and read NPV at A first. A single future amount with no series is simpler on the PV page.
IRR on the same first series is about 17.09%. CAGR and rate of return do not read yearly flows. FV goes from today forward, without discounting a series.
The result does not know risk or a changing rate. 2261 at 8% is not an investment decision, only the sum of discounted entries. Terminal value joins the last year before discounting, not as a separate magic bonus.
Enter 10000, 8, and four years 3000, 3500, 4000, 4500. Check about 2261. Then raise the rate to 12% from the third example to see the minus.
How to use this calculator
- In Initial investment / cost, enter a positive number, for example 10000. It lands in year 0 as an outflow.
- In Annual discount rate A (%), enter the hurdle, for example 8. That rate builds the headline NPV.
- Fill each later year. Add a missing year with the button. Inflows positive, outlays negative.
- Optionally turn on rate B, a terminal value, and the discounted-flow table, including year 0.
- Click Calculate. At 10000, 8%, and 3000 / 3500 / 4000 / 4500, NPV should be about 2261.43.
Formula
NPV = Σt=0…N CFt / (1 + r)t
Enter the initial investment as a positive number; the model places it at t = 0 as an outflow. r is annual discount rate A as a decimal. Terminal value is added to the last CF. PI = discounted inflows / |discounted outflows|.
Model: classic net present value at a fixed annual rate — no monthly discounting and no risk factor inside the result.
NPV as the sum of discounted cash flows
NPV = sum of CF_t ÷ (1+r)^t. With 10000 up front, 8%, and 3000, 3500, 4000, 4500, NPV is about 2261.43.
- NPV
- Net present value of this series. 10000, 8%, and four inflows is about 2261.43. 50000 at 10% with 12000 for 5 years plus 5000 TV is about −1406.
- discount rate
- Annual discount rate A (%). 8% in example 1. 12% on 20000 with weaker inflows drops NPV to about −6719.
- PI
- Profitability index next to NPV. Example 1 with +2261.43 shows PI > 1. That is not IRR.
Worked examples
Example 2
- Initial investment: 50,000
- Discount rate: 10%
- Cash flows (years 1-5): 12,000 each year
- Terminal value: 5,000
NPV ≈ −1,405.95
Undiscounted sum ≈ 15,000.00
What is NPV at 50,000, 10%, 12,000 × 5 years, and terminal value 5,000? About −1,405.95.
Example 3
- Initial investment: 20,000
- Discount rate: 12%
- Cash flows (years 1-4): 5,000 / 5,000 / 5,000 / 2,000
NPV ≈ −6,719.81
Undiscounted sum ≈ −3,000.00
What is NPV at 20,000, 12%, and inflows 5,000/5,000/5,000/2,000? About −6,719.81.
Example 4
- Initial investment: 10,000
- Rate A: 8%
- Rate B: 12%
- Cash flows (years 1-4): 3,000 / 3,500 / 4,000 / 4,500
NPV @ 8% ≈ 2,261.43
NPV @ 12% ≈ 1,175.70
Δ (B − A) ≈ −1,085.73
How does NPV change at rate B 12% vs A 8%? At A ≈ 2,261.43; at B ≈ 1,175.70 (difference ≈ −1,085.73).
Which tool should you use
- NPV - when you have uneven yearly cash flows and want a currency result at a chosen discount rate.
- IRR - when you want the project’s percentage rate (the rate that sets NPV to zero) versus a required return.
- PV - when it is one future amount or equal payments, not a full inflow/outflow schedule.
- FV - when you are growing savings over time, not scoring an investment project.
NPV does not speak to risk or rate volatility - with the same cash flows, a different discount rate can flip the sign.
Related calculators
FAQ
How does the NPV formula work on this page?
NPV sums discounted cash flows: each year t divides CF_t by (1+r)^t, and the model places the initial investment in year 0 as an outflow. At 10,000, 8%, and inflows 3,000, 3,500, 4,000, 4,500 the result is about 2,261.43.
How should I read the cash-flow rows?
The investment field is CF₀ (outflow). Each added row is the next full year. Paste a list or fill equal amounts under options. An empty period is 0.
What are discount rate A and rate B?
Rate A is the main hurdle in the annual discount-rate field. Rate B is an optional comparison on the same series. Results show NPV at B and the B − A gap.
What does terminal value do?
Terminal value (e.g. salvage) adds to the last year’s cash flow before discounting.
What does the discounted cash-flow table show?
For each year: CF, PV at A, optional PV at B, and cumulative PV at A. The sum of PV at A equals primary NPV.
How does NPV differ from IRR?
NPV is a money amount at a chosen rate. IRR finds the rate that makes that amount zero. On the same first series IRR ≈ 17.09%.
Is positive NPV an investment recommendation?
No. It is an estimate at a flat rate and your cash flows — not an investment decision or a risk score.
How many years can I add?
Up to 24 periods. Monthly cash flows and a time-varying rate stay outside this model.
What does a positive NPV mean on this calculator?
A positive NPV means that at your chosen discount rate the sum of discounted cash flows exceeds the initial investment. It is an estimate from your inputs — not an investment recommendation or a risk rating.
What is the profitability index (PI) next to NPV?
PI is the present value of inflows divided by the initial outlay. On the first example series PI is above 1 when NPV is positive. The calculator shows PI beside the main result.
How does terminal value affect NPV?
Terminal value (for example a sale) is added to the last year’s cash flow before discounting. In the 50,000 / 10% example, even with a 5,000 terminal value NPV stays negative.
Do NPV and IRR always point the same way?
Not always. NPV is an amount at a chosen rate; IRR is the rate that drives NPV to zero. On the first example series IRR is about 17.09%, but project rankings can diverge with uneven cash flows.
Knowledge sources
NPV sums discounted cash flows. You enter the rate yourself.
Page updated October 21, 2026.