Free NPV Calculator
NPV Calculator
Calculate net present value to see if an investment creates or destroys value. Enter your cash flows and discount rate for instant results.
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Calculate the net present value of any investment, project, or business decision. Enter your discount rate, initial investment, and expected cash flows to see whether a project creates or destroys value — instantly, with sensitivity analysis and visual charts. Used by CFOs, CPA candidates, and startup founders evaluating capital allocation.
How to Calculate Net Present Value
- 1
Enter your initial investment
The upfront cost of the project or investment — equipment, down payment, or capital outlay.
- 2
Set your discount rate
Your required rate of return or cost of capital. 8-12% is typical for most businesses. Higher = more conservative.
- 3
Add cash flows per period
Enter expected cash flows for each period. Click "Add Period" for more rows. Use negative numbers for periods with net costs.
- 4
Review the results
Positive NPV = the project creates value. Negative = it destroys value. Check the sensitivity table to see how the result changes at different discount rates.
Why NPV Matters for Business Decisions
The gold standard of investment analysis
NPV is the most widely accepted method for evaluating investments. Unlike simple payback, it accounts for the time value of money — a dollar today is worth more than a dollar next year.
Compare unlike investments
Considering a new hire vs new equipment vs marketing spend? NPV lets you compare completely different investments on the same scale — which one creates the most value?
Built-in risk adjustment
The discount rate captures risk. Higher-risk projects get a higher rate, which naturally reduces their NPV. The sensitivity table shows exactly how sensitive your decision is to rate assumptions.
CPA exam essential
NPV is tested heavily on the BAR section of the CPA exam. Practice with real numbers here — no spreadsheet setup required.
Frequently Asked Questions
What is a good NPV?
Any positive NPV means the project creates value above your required return. An NPV of $0 means the project earns exactly your discount rate. In practice, higher NPV is better, but also consider the profitability index (NPV / investment) to compare projects of different sizes.
How do I choose a discount rate?
Use your weighted average cost of capital (WACC) for corporate projects, or your personal required return for investments. Common ranges: 8-10% for established businesses, 15-25% for startups, 3-5% for very safe projects. When in doubt, use 10% and check the sensitivity table.
What is the difference between NPV and IRR?
NPV tells you the dollar value created. IRR tells you the percentage return. They usually agree on accept/reject decisions, but can disagree when comparing mutually exclusive projects. NPV is generally preferred because it accounts for project scale and reinvestment assumptions.
Can NPV handle uneven cash flows?
Yes — that is one of NPV's biggest advantages. Enter any pattern of cash flows: growing, declining, irregular, or even negative in some periods. The calculator discounts each period individually.
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