Worked example
Investing $10,000 for five $3,000 annual inflows at a 10% discount rate produces a positive NPV.
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Business finance
NPV Calculator
Estimate net present value using equal annual cash inflows.
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Adjust the example to calculate using your own figures. Results update instantly.
Your results
Calculated locally- Net present value
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- Present value of inflows
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Important assumptions
Only equal year-end cash inflows are supported; no terminal value, irregular flows or taxes are modeled.
How to use your results
The net present value compares today's investment with the discounted value of expected future cash flow. A positive result depends on the selected discount rate.
Start with the example values, then replace them with amounts for the same transaction or time period. Double-check rates and units. The results are estimates intended to help you explore possible outcomes, not financial or tax advice.
Why future cash flows are discounted
Money expected next year is generally worth less than money available today because current funds can be invested and future payments carry uncertainty. A discount rate expresses the return you require to accept that delay and risk.
Positive NPV is conditional
A positive NPV means the modeled inflows exceed the initial investment after applying the selected discount rate. Changing the rate or forecast cash flow can reverse the result, so test multiple realistic scenarios.
Can I use irregular yearly cash flows?
This version assumes the same cash inflow at each year-end. A project with uneven payments or a resale value needs a more detailed cash-flow model.
How to calculate npv
NPV = −investment + Σ annual cash flow ÷ (1 + discount rate)^year
The net present value compares today's investment with the discounted value of expected future cash flow. A positive result depends on the selected discount rate.