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NPV Calculator

Reviewed by the CalculatorHub team, edited by James Graham. Standard NPV formula. Last verified 14 June 2026.

Net present value (NPV) evaluates whether an investment returns more than your required rate of return. Enter your discount rate, the initial investment cost, and expected annual cash flows for each year. The calculator sums the discounted cash flows to show the NPV. A positive NPV indicates a good investment; negative suggests rejecting the project.

Required return (%)
Negative cash outflow at year 0
Years 1, 2, 3, etc.
Sum of discounted cash flows 13,722.82
Net present value 13,722.82

NPV formula

NPV = CF_0 + Sum(CF_t / (1 + r)^t) for t = 1 to N
where CF_t = cash flow in year t, r = discount rate, N = number of years

CF_0 is typically the negative initial investment cost. Each future cash flow is discounted by the factor (1+r)^t.

How to use this calculator

  1. Enter your required rate of return (discount rate) in percent.
  2. Enter the initial investment as a negative number (e.g., -100,000).
  3. Enter expected annual cash flows, separated by commas, for each year.
  4. The calculator shows the NPV. Positive values favor the investment.

NPV decision rule

  • NPV > 0: Invest. The project returns more than required.
  • NPV = 0: Indifferent. Returns equal your required rate exactly.
  • NPV < 0: Do not invest. The project underperforms.

NPV calculator: frequently asked questions

What is net present value?

NPV is the sum of all discounted cash flows from an investment. A positive NPV means the investment returns more than your required rate; negative NPV means it returns less.

How is NPV calculated?

NPV = Sum of (CF_t / (1+r)^t) for all years. Each future cash flow is discounted back to present value and summed, including the initial investment (negative outflow).

What discount rate should I use?

Use your required rate of return or cost of capital. For a business investment, this might be the weighted average cost of capital (WACC). For personal projects, use an inflation-adjusted target return.

What does a positive NPV mean?

Positive NPV means the project returns more than your required rate. You should invest. Negative NPV means the project underperforms your target return.

Can NPV be negative?

Yes, if discounted future cash flows do not cover the initial investment or discount rate, NPV is negative. This signals a poor investment.

Official sources

Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.