Net Present Value (NPV) Calculator
Calculate net present value (NPV) for an investment with equal yearly cash flows, a discount rate and an optional terminal value, to see whether it beats your required return.
Last updated: October 2026
Net Present Value
$11,795.88
Formula below · 2 sources (biz.libretexts.org, openstax.org) · Updated Oct 2026
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About this calculator
Net present value adds up what each future cash flow is worth today and subtracts the cost of the investment. With the same cash flow CF at the end of each of n years:
NPV = −I + CF × (1 − (1 + r)^−n) ÷ r + TV ÷ (1 + r)ⁿ
I is the initial investment, r the discount rate and TV an optional terminal value (a sale or salvage amount) received at the end of the last year. The middle term is the present value of the stream of equal cash flows.
Reading the result
A positive NPV means the investment earns more than the discount rate and adds that many dollars of value in today's terms; a negative NPV means it falls short. At NPV = 0 the return equals the discount rate exactly; that rate is the internal rate of return (IRR).
Limits
This page assumes the same cash flow every year, arriving at the end of each year. For cash flows that change from year to year, discount each one separately, CFₜ ÷ (1 + r)ᵗ, and add them up. Use the rate that reflects the risk: a company's cost of capital or the return you could earn elsewhere.
How to use
Enter the up-front cost, the yearly cash flow, the discount rate, the number of years and any terminal value. The default, $100,000 invested for $28,000 a year for 5 years at 8%, gives 28,000 × 3.9927 − 100,000 = $11,795.88, so the project beats 8%. With $50,000 invested, $12,000 a year for 5 years, a 10% rate and a $5,000 terminal value: 12,000 × 3.7908 + 5,000 ÷ 1.6105 − 50,000 = −$1,405.95, so that project falls short of 10%.
Frequently asked questions
What does a negative NPV mean?
The cash flows, discounted at your rate, are worth less than the investment. The project may still make money in plain dollars, but it earns less than the return you required, so the money would do better elsewhere at that rate.
How do I choose the discount rate?
Use the return you need for the risk involved: a company usually uses its weighted average cost of capital (WACC) or a hurdle rate, an individual the return they could earn on a comparable investment. Try a range of rates to see how sensitive the answer is.
How is NPV related to IRR?
IRR is the discount rate that makes NPV exactly zero. If the IRR is above your discount rate, NPV is positive. NPV is better for comparing projects of different sizes because it measures dollars of value, not a rate.
What if my cash flows are different each year?
Discount each year separately and add them: NPV = −I + CF₁ ÷ (1 + r) + CF₂ ÷ (1 + r)² + … For $100,000 invested and 20,000, 25,000, 30,000, 30,000 and 25,000 at 8%, the discounted flows add to $102,832.43, so NPV = $2,832.43.
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