Calculate NPV

Discount regularly spaced future cash flows to today and compare their present value with an immediate investment.

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ToolNPV Calculator
Input
Output
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How it works

Each amount is divided by one plus the discount rate raised to its zero-based period, so the first flow occurs immediately and is not discounted. Payback uses undiscounted cumulative cash, while profitability index compares discounted inflows with the absolute first outlay; 10% is only an editable hurdle-rate scenario.

Formula
NPV = Σ cash flowₜ ÷ (1 + rate)ᵗ
  • Cash-flow order represents equal periods such as years or months, not arbitrary calendar dates.
  • The profitable flag changes only when discounted NPV is above zero.

Worked example

A project costing 1000 up front
Four years of returns discounted at 10%
Input
											Cash flows: [-1000,300,400,500,600]
Rate percent: 10
Output
												NPV: 388.77
Profitable: yes
Total undiscounted: 800
Payback years: 3
Profitability index: 1.39

When to use this

Capital-budgeting proposals, property cash-flow models, and spreadsheet audits use regularly spaced inflows and outflows with an explicit opportunity-cost rate.

Edge cases

  • A -100% rate is rejected because later cash flows would divide by zero; the lowest accepted rate is -99%.
  • If cumulative undiscounted cash never reaches zero, payback is reported as never even when the discounted NPV is also negative.
  • If the first flow is zero, profitability index is reported as 0 because there is no initial outlay denominator.

References