Net Present Value (NPV) Calculator

Net present value is the sum of every future cash flow discounted back to today, minus the initial outlay. It tells you how much value an investment creates in today's money at a chosen discount rate.

NPV is the sum over each period t of cash flow divided by (1 + r) to the power t, where r is the discount rate as a decimal. The cash flow at time zero is added at full value because no discounting applies yet.

Usually yes. The cash flow at time zero is the initial investment or outlay, so it is entered as a negative number. Later inflows are positive and earlier outflows are negative.

A positive NPV means the investment is expected to earn more than your discount rate, so it adds value. A negative NPV means it falls short of that required return at the rate you entered.

The discount rate usually reflects your required return or cost of capital. A higher rate discounts future cash flows more heavily and lowers the NPV, while a lower rate raises it.