Audited —·Last updated 27 Jul 2026·6 citations·Tier 1·0 uses

NPV Calculator

Free NPV calculator: compute the net present value of any cash-flow series at a chosen discount rate, with the CF0-timing convention fully explained.

NPV Calculator

Comma-separated cash flows. The FIRST value is period 0 — your undiscounted initial outlay, usually negative. Every value after that is discounted at 1, 2, 3... years.
Your required rate of return or cost of capital — often a company's WACC, or an investor's opportunity cost. Higher discount rates penalize distant cash flows more heavily.
%
Net present value
$1,838.67
The sum of every cash flow discounted back to today. Positive means the project creates value at your discount rate; negative means it destroys value.
Initial outlay (period 0)
$-10,000.00
Present value of future cash flows
$11,838.67
Number of periods entered
5
Discount rate (decimal)
0.1

Background.

An NPV calculator answers the single most important question in capital budgeting: once every future dollar a project or investment produces is discounted back to today at your required rate of return, does it create value or destroy it? Net present value is the sum of a series of cash flows, each divided by (1 plus the discount rate) raised to the power of how many periods away it lands. A positive NPV means the investment is expected to return more than your discount rate demands; a negative NPV means it returns less, even if every individual cash flow is positive in nominal terms. This is the calculation that corporate finance departments run before approving a factory expansion, that private equity analysts run before bidding on a company, and that anyone comparing "put $10,000 in now, get money back over five years" opportunities should run before committing capital.

This calculator settles a convention question that causes more disagreement between NPV tools than any other design choice: is the first number you type in discounted, or not? Here, the first entry in the cash-flow list is period 0 — your undiscounted initial outlay, entered as a negative number because it is money leaving your pocket today. Every entry after that is discounted at one, two, three, and so on years out. This matches the textbook identity used in Brealey, Myers and Allen's Principles of Corporate Finance, NPV = CF0 + the sum of CF_t divided by (1+r)^t for t = 1 through n, and it matches how a financial calculator's CF0 register works on an HP 12C or a TI BA II Plus. It is worth stating explicitly because Excel's own NPV() function does the opposite: it assumes every value you feed it is already one period in the future, so naively wrapping a five-cash-flow project in =NPV(rate, range) silently discounts the period-0 outlay by one extra year and gives a wrong answer. The correct Excel formula is =CF0 + NPV(rate, CF1:CFn) — the initial outlay added back in, undiscounted, outside the function call. This calculator does the CF0-undiscounted math for you automatically, so you never have to remember the workaround.

The discount rate you choose matters as much as the cash flows themselves. For a corporation evaluating an internal project, the standard input is the weighted average cost of capital (WACC) — the blended return debt and equity holders require. For a personal investor comparing two payout structures, the discount rate is your opportunity cost: the return you could earn on the next-best alternative use of that money. Raising the discount rate always lowers NPV, because it penalizes distant cash flows more severely than near-term ones — this is exactly why NPV is the finance profession's preferred tool for ranking mutually exclusive projects with different cash-flow timing, where a simpler metric like total undiscounted profit or payback period can rank the wrong project as the winner.

Enter your full cash-flow series as a comma-separated list, starting with the period-0 outlay, and a discount rate. The calculator returns the net present value, the initial outlay echoed back for confirmation, the present value of everything from period 1 onward, a count of parsed periods so you can catch a dropped value, and your discount rate as a decimal. Below the widget you will find the full formula derivation, a hand-verified worked example, FAQs on the Excel footgun, NPV versus IRR, and how to choose a discount rate, and citations to Brealey/Myers/Allen, Bodie/Kane/Marcus, the CFA Institute curriculum, and the SEC's Investor.gov glossary.

What is npv calculator?

Net present value (NPV) is the sum of a project's or investment's entire cash-flow stream, with every cash flow discounted back to today's dollars at a chosen rate. The formula is NPV = the sum, for every period t from 0 to n, of the cash flow at time t divided by (1 plus the discount rate) raised to the power t. Because the exponent at t = 0 is zero and anything raised to the zero power is one, the period-0 cash flow is never actually discounted — it passes through unchanged. That is by design: the period-0 entry represents money changing hands today, which needs no time-value adjustment. Every later cash flow is shrunk by the discount factor, and the further out it lands, the more it shrinks. NPV is the workhorse metric of capital budgeting because it directly answers a yes/no investment question in the investor's own currency: a positive NPV project is expected to return more than the discount rate demands, and a negative NPV project is expected to return less, regardless of how large its nominal, undiscounted profit looks on paper. Unlike the internal rate of return, NPV produces a single dollar figure that is directly additive across projects and unambiguous even when a project has unconventional cash flows that could otherwise produce multiple IRR solutions.

How to use this calculator.

  1. Enter your full cash-flow series as a comma-separated list. The first number is period 0 — your initial outlay, entered as a negative number if money is leaving your hands today.
  2. Enter every subsequent cash flow in order: period 1, period 2, and so on, using the same currency and the same period length (usually years) throughout the series.
  3. Enter your discount rate as a percentage. Use your company's weighted average cost of capital for a corporate project, or your realistic opportunity-cost return for a personal decision.
  4. Read the net present value. Positive means the series creates value at your discount rate; negative means it destroys value even if the nominal cash flows sum to a profit.
  5. Check the cash-flow count against how many numbers you intended to enter — a mismatch usually means a stray character broke the parser and a value was dropped.
  6. Re-run the calculator at a higher and a lower discount rate to see how sensitive your conclusion is — NPV can flip sign within a realistic range of discount-rate assumptions for marginal projects.

The formula.

NPV = Σ CFₜ ⁄ (1+r)ᵗ
NPV · net present valueCFₜ · cash flow at period tr · discount ratet · period index (0, 1, 2, ...)

The calculator sums every cash flow you enter, each divided by (1 plus the discount rate) raised to the power of its period index. Period 0 — the first number in your list — has an exponent of zero, so (1+r)^0 equals 1 and the initial outlay passes through completely undiscounted. This is the CF0-undiscounted convention documented above: it matches the standard corporate-finance textbook identity NPV = CF0 + the sum from t=1 to n of CF_t divided by (1+r)^t, and it is the convention used by financial calculators' CF0 registers.

Every cash flow from period 1 onward is discounted by successively larger powers of (1+r). At a 10 percent discount rate, a dollar received one year from now is worth 1 divided by 1.10, or about 90.9 cents today. The same dollar two years out is worth 1 divided by 1.21, or about 82.6 cents. The discounting compounds geometrically, which is why cash flows far in the future contribute very little to NPV at any meaningful discount rate — a dollar 20 years out at 10 percent is worth only about 14.9 cents today.

The calculator reports two supporting figures alongside the headline NPV. The initial outlay is your period-0 entry, echoed back so you can confirm it was parsed correctly. The present value of inflows is the sum of every discounted cash flow from period 1 onward — comparing this figure against the (usually negative) initial outlay shows you the raw discounted payback math before netting the two together. All arithmetic runs in arbitrary-precision Decimal.js math so that long cash-flow series and small discount-rate differences do not accumulate floating-point rounding error.

A worked example.

Example

A small business is considering a piece of equipment that costs $10,000 today and is expected to generate $3,000, $4,000, $5,000, and $3,000 in the four years that follow. The owner's required rate of return is 10 percent. Entering -10000, 3000, 4000, 5000, 3000 with a 10 percent discount rate, the calculator discounts each future cash flow: $3,000 one year out becomes $2,727.27 today, $4,000 two years out becomes $3,305.79, $5,000 three years out becomes $3,756.57, and $3,000 four years out becomes $2,049.04. Summed, the present value of the four future inflows is $11,838.67. Subtracting the $10,000 initial outlay (which is not discounted, since it happens at period 0) leaves a net present value of $1,838.67. Because the NPV is positive, the equipment purchase is expected to earn more than the owner's 10 percent required return — the project clears the hurdle by $1,838.67 in today's dollars, and the owner should proceed, all else being equal. If the required return had instead been higher — say the owner's true cost of capital was 18 percent rather than 10 percent — the same cash flows would produce a negative NPV, and the correct decision would flip to rejecting the purchase even though the total nominal cash received never changed.

discount Rate Percent10
cash Flows-10000, 3000, 4000, 5000, 3000

Frequently asked questions.

Why is the first cash flow (period 0) not discounted?
Because it happens today. Discounting adjusts a future dollar amount to reflect the time value of money — a dollar next year is worth less than a dollar today because of the return you forgo by waiting for it. A cash flow occurring right now needs no such adjustment; its present value is simply its face value. Mathematically, the discount factor for period 0 is (1 plus the rate) raised to the power zero, which always equals 1, so dividing by it leaves the value unchanged. This calculator's period-0 entry is exactly that: the initial outlay or inflow that happens at the moment of the decision, entered without any discounting applied.
Why does Excel's NPV() function give a different answer than this calculator?
Excel's built-in NPV() function assumes every value you feed it is already one period in the future — it discounts the very first argument by one full period, not zero. If you naively wrap your entire cash-flow series, including the period-0 outlay, in =NPV(rate, range), Excel silently discounts your initial investment by one extra year, understating the true cost and overstating NPV. The standard fix, documented in Microsoft's own function help and in every corporate-finance textbook, is =CF0 + NPV(rate, CF1:CFn) — add the undiscounted period-0 outlay outside the function call, and only pass the period-1-onward cash flows into NPV(). This calculator applies that correction automatically: your period-0 entry is never discounted, matching the textbook definition rather than the raw spreadsheet function.
What discount rate should I use?
For a corporate capital-budgeting decision, the standard choice is the weighted average cost of capital (WACC) — the blended return required by the company's debt and equity holders, reflecting the project's risk. For a personal financial decision, the discount rate should reflect your realistic opportunity cost: the return you could earn on the next-best alternative use of the same money, adjusted for the relative risk of the two options. Using too low a discount rate makes marginal or bad projects look attractive; using too high a rate can cause you to reject genuinely value-creating opportunities. The CFA Institute curriculum and most corporate-finance textbooks recommend re-running the analysis at several plausible discount rates to see how sensitive the conclusion is, rather than relying on a single point estimate.
What does a negative NPV mean if the project is still profitable in total dollars?
It means the project returns less than your required rate of return, even though the nominal, undiscounted cash flows sum to more than the initial outlay. This is the entire point of discounting: a dollar of profit received in year ten is worth much less today than a dollar of profit received in year one, so two projects with identical total nominal profit can have very different NPVs if their cash flows arrive on different schedules. A negative NPV project is not necessarily a project that loses money in an accounting sense — it is a project that fails to clear the bar you set with your discount rate, meaning your capital would be expected to do better somewhere else at the same risk level.
How is NPV different from IRR?
NPV is a dollar amount computed at a discount rate you choose; the internal rate of return (IRR) is the discount rate at which NPV equals exactly zero, solved for algebraically rather than assumed. NPV directly answers "does this create value at my required return," while IRR answers "what is the break-even return this project implies." The two usually agree on accept/reject decisions for a single conventional project, but they can disagree when ranking mutually exclusive projects of different sizes or cash-flow timing, and a cash-flow series with more than one sign change can produce more than one mathematically valid IRR while NPV always produces a single unambiguous figure at any given rate. Most corporate-finance texts, including Brealey, Myers and Allen, recommend NPV as the primary decision rule specifically because it does not share IRR's ranking and multiple-solution pitfalls.
Can NPV be used to compare two projects of different sizes?
NPV is an absolute dollar figure, so a larger project will tend to show a larger NPV even if it is proportionally less efficient with capital. When comparing projects of meaningfully different scale, it is common practice to also compute a profitability index (present value of future inflows divided by the initial outlay) or to compare NPV per dollar invested, so a small highly efficient project is not automatically dismissed against a large project with a bigger absolute NPV but lower efficiency. NPV alone is the right tool when the decision is simply whether to accept or reject a single project, or when comparing projects that require the same upfront capital.
Does NPV account for risk?
Only indirectly, through the discount rate. NPV itself is a mechanical calculation — sum the discounted cash flows — and it will accept whatever discount rate you supply without question. The standard way risk enters the analysis is by using a higher discount rate for riskier projects (reflecting a higher required return for bearing more uncertainty) and a lower rate for safer, more predictable cash flows. Some practitioners instead risk-adjust the cash-flow estimates themselves (using conservative, probability-weighted figures) and apply a single risk-free-adjacent discount rate. Either approach is defensible, but NPV computed with an inappropriately low discount rate will systematically overstate how attractive a risky project really is.
What if my cash-flow series has no negative entries, or is all negative?
NPV is still perfectly well-defined and the calculator will compute it — an all-positive series (for example, a subsidy that only pays money to you with no cost) will always produce a positive NPV at any discount rate below the point where the series would need to turn negative; an all-negative series (pure costs with no offsetting benefit) will always produce a negative NPV. In practice, however, a meaningful capital-budgeting decision almost always has a negative period-0 entry (the cost of undertaking the project) followed by positive entries (the benefits), which is the classic "invest now, earn later" pattern this calculator is built around.

References& sources.

  1. [1]Brealey, R.A., Myers, S.C., and Allen, F. — Principles of Corporate Finance, 13th edition. Chapter 5 develops the NPV rule, the CF0-undiscounted convention, and the comparison with IRR.
  2. [2]Bodie, Z., Kane, A., and Marcus, A.J. — Investments, 12th edition. Covers discounted cash-flow valuation and the role of the required rate of return in present-value analysis.
  3. [3]CFA Institute — CFA Program Curriculum, Corporate Issuers topic area, covering capital budgeting and the net present value decision rule.
  4. [4]U.S. Securities and Exchange Commission, Investor.gov — Net Present Value (NPV) glossary entry.
  5. [5]U.S. Securities and Exchange Commission, Investor.gov — Financial tools and calculators for investment analysis.
  6. [6]Federal Reserve Economic Data (FRED) — benchmark interest-rate series commonly used to anchor discount-rate assumptions in present-value analysis.
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