NPV Calculation
Enter your cash flow details to calculate the net present value
The amount you expect to receive in the future
Annual discount rate (required rate of return)
Number of years until you receive the cash flow
Understanding NPV
Learn about Net Present Value and its applications
What is NPV?
Net Present Value (NPV) calculates what a future cash flow is worth in today's money. It accounts for the time value of money - the principle that money available today is worth more than the same amount in the future due to its potential earning capacity.
When to Use NPV
- • Investment decision making
- • Project evaluation and comparison
- • Business valuation
- • Retirement planning
- • Loan and financing decisions
Interpreting Results
- • Positive NPV: Investment is profitable
- • Negative NPV: Investment loses money
- • Zero NPV: Investment breaks even
Key Factors
- • Discount Rate: Your required return
- • Time Period: When you receive money
- • Cash Flow: Amount you expect