Net Present Value (NPV) Calculator
Discount a series of future cash flows to find their net present value (NPV) and profitability index at your required rate.
Your inputs
Results
Net present value
$1,646.35
- Present value of future cash flows
- $11,646.35
- Profitability index
- 1.1646
- Rule of thumb
- NPV > 0: adds value at this discount rate
✓Exact calculation — rounded only for display
| Period | Cash flow | Discount factor | Present value |
|---|---|---|---|
| 0 | -$10,000.00 | 1 | -$10,000.00 |
| 1 | $3,000.00 | 0.925926 | $2,777.78 |
| 2 | $4,000.00 | 0.857339 | $3,429.36 |
| 3 | $5,000.00 | 0.793832 | $3,969.16 |
| 4 | $2,000.00 | 0.73503 | $1,470.06 |
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What this calculator does
NPV converts future cash flows into today’s money using a discount rate that reflects risk and the opportunity cost of capital. Positive NPV means a project earns more than that rate.
Formula and method
Worked example
Calculated by this tool with its default inputs:
Inputs
- Discount rate per period: 8 %
- Initial investment (time 0): 10000 (any currency)
- Cash flows for periods 1, 2, 3 … (negative allowed): 3000, 4000, 5000, 2000
Results
- Net present value: 1,646.35
- Present value of future cash flows: 11,646.35
- Profitability index: 1.1646
- Rule of thumb: NPV > 0: adds value at this discount rate
How to read the results
Choose projects with positive NPV; among mutually exclusive options, the higher NPV generally adds more value.
Assumptions and limitations
- Cash flows are assumed to occur at the end of each period.
- NPV is very sensitive to the discount rate — test a range.
Financial results are estimates based on the inputs and assumptions shown. They are not financial advice; confirm figures with your lender, provider or a qualified adviser before making decisions.
Questions
What discount rate should I use?
Typically your cost of capital or the return you could earn on an alternative of similar risk.
Methodology and verification
- Result type
- Exact mathematical calculation (rounded only for display)
- Formula version
- 1.0
- Automated verification
- 3 reference and validation test cases, checked against independently computed values. The site cannot be built if any of them fail.
- Editorial review
- Awaiting human editorial review. The explanation was drafted with AI assistance; the formula and examples are verified by the automated tests above.
Privacy
Everything you enter is calculated in this browser and is not sent to Numerith or anyone else. Because this calculator can involve personal financial or health details, your inputs are never added to share links or saved to history. Privacy policy