Net Present Value (NPV) Calculator

Net present value is the value calculated by discounting future cash flows to their present value at a specific discount rate. If NPV is positive, the investment is considered profitable; if negative, it is considered unprofitable.

NPV = Sum(Ct / (1+r)^t). Where Ct is each period's cash flow, r is the discount rate, and t is the period number. The initial investment is entered as a negative value.

The discount rate is generally set as the cost of capital, alternative investment return, or minimum expected return rate. Higher discount rates are used for riskier projects.