Net Present Value (NPV) Calculator

Net present value is the total of every cash flow in a project discounted back to today's money, including the initial outlay at full value. It answers a single question: after accounting for the time value of money at your chosen rate, does this investment add value or destroy it?

It sums each period's cash flow divided by (1 + r) raised to the power of the period number, where r is the discount rate as a decimal and periods start at zero. The year zero flow is divided by one, so it enters undiscounted, while a year three flow at 10% is divided by 1.1 cubed.

Year zero is the money you commit up front, such as the purchase price or build cost, so it leaves your pocket and is written as a negative. Later years are usually positive inflows, though you can enter a negative in any year for a planned outflow like a mid-project repair.

A positive NPV means the discounted inflows outweigh what you put in, so the project earns more than your discount rate and the panel turns green. A negative NPV means it earns less than that rate and the panel turns red. A value near zero means it roughly breaks even at the rate you chose.

The rate usually reflects your cost of capital or the return you could earn elsewhere at similar risk. Raising the rate discounts distant cash flows more heavily and pushes NPV down, which is why the same -1000, 300, 400, 500 series is negative at 10% but positive at 5%.

You can add as many yearly rows as your project needs by clicking Add year, and you must keep at least two rows, an outlay plus one more period. Each period is treated as one full compounding step of the discount rate.

Yes. Every year is an independent input, so the amounts can rise, fall, or turn negative in any pattern. The one assumption is that each row is spaced one period apart, so it is built for annual, end-of-year flows rather than mid-year or monthly timing.

NPV gives a dollar amount of value created at a rate you supply, while the internal rate of return is the single rate that would make NPV exactly zero. They are two views of the same cash flows; use NPV when you have a required return in mind and IRR when you want the project's own break-even rate.

Yes. The discounting runs entirely in your browser and none of your rates or cash flows are sent to a server or saved. You can close the tab and nothing about your project remains.