NPV Calculator
Net present value is the sum of discounted cash flows minus the initial investment: paying 1000 for 300 a year over 5 years at 10 % gives NPV = 137.24, so the project adds value.
Separate with commas or spaces; use a minus sign for outflows.
137.236030822534
Full answer, then cut to fewer decimals (not rounded):
- 137.236030822534
- 137.23603082253
- 137.2360308225
- 137.236030822
- 137.23603082
- 137.2360308
- 137.236030
- 137.23603
- 137.2360
- 137.236
- 137.23
- 137.2
- PV of cash inflows
- 1,137.24
- Profitability index
- 1.1372
- Payback period
- 3.333 periods
- Decision
- NPV > 0: accept
| Period t | Cash flow | Discount factor 1/(1+r)ᵗ | Present value |
|---|---|---|---|
| 1 | 300.00 | 0.909091 | 272.73 |
| 2 | 300.00 | 0.826446 | 247.93 |
| 3 | 300.00 | 0.751315 | 225.39 |
| 4 | 300.00 | 0.683013 | 204.90 |
| 5 | 300.00 | 0.620921 | 186.28 |
Step-by-step solution
- PV of each cash flow = CFₜ ÷ (1 + 10 %)ᵗ
- Sum of PVs = 1,137.24
- NPV = 1,137.24 − 1,000.00 = 137.24
NPV Formula
NPV = Σ CFₜ ÷ (1 + r)ᵗ − C₀
CFₜ cash flow in period t, r discount rate per period, C₀ initial investment
Worked Example
An investment of 1000 returning 300 a year for 5 years at a 10 % discount rate:
- PV of each cash flow = CFₜ ÷ (1 + 10 %)ᵗ
- Sum of PVs = 1,137.24
- NPV = 1,137.24 − 1,000.00 = 137.24
Profitability index: 1.1372 · Payback period: 3.333 periods · Decision: NPV > 0: accept
| Period t | Cash flow | Discount factor 1/(1+r)ᵗ | Present value |
|---|---|---|---|
| 1 | 300.00 | 0.909091 | 272.73 |
| 2 | 300.00 | 0.826446 | 247.93 |
| 3 | 300.00 | 0.751315 | 225.39 |
| 4 | 300.00 | 0.683013 | 204.90 |
| 5 | 300.00 | 0.620921 | 186.28 |
Frequently asked questions
How do I calculate NPV in Excel?
Excel’s NPV function discounts from period 1, so subtract the initial investment separately: =NPV(10%, B2:B6) − 1000. For the example that returns 137.24.
What does a positive NPV mean?
The project earns more than the discount rate (the required return), so it adds value. Accept projects with NPV > 0; when choosing between projects, prefer the higher NPV.
What is the profitability index?
The PV of future inflows divided by the initial investment. PI > 1 corresponds to NPV > 0; it is useful for ranking projects when capital is limited.
Sources
Last reviewed: . Factors are stored exactly and computed with 50-digit decimal arithmetic. See how we verify conversion factors.
Cite this page
APA
Scientific Converters. (2026, October 15). NPV Calculator. Retrieved October 25, 2026, from https://scientificconverters.com/calculators/npv-calculator/
IEEE
Scientific Converters, "NPV Calculator," scientificconverters.com. Accessed: Oct. 25, 2026. [Online]. Available: https://scientificconverters.com/calculators/npv-calculator/