NPV Calculator
Calculate net present value, profitability index, and IRR for project cash flows.
Key Results
Use a negative value for an outflow
Cash Flows
NPV
-2103.68
Net present value
IRR
8.90 %
Internal rate of return
Profitability Index
0.98
PV inflows / initial outflow
How we calculate
NPV discounts each cash flow by 1 / (1 + r)^t. Profitability index divides the PV of inflows by the absolute initial investment. IRR is the rate that sets NPV to zero, solved iteratively.
Quick Answer
NPV is the present value of future cash flows minus the initial investment. If NPV is positive, the project adds value at the chosen discount rate.
Key Facts
- NPV discounts each cash flow by 1 / (1 + r)^t
- Profitability index = PV of inflows / |initial outflow|
- IRR is the discount rate that sets NPV to zero
- Positive NPV suggests value creation at your chosen rate
What if the discount rate changed?
See how different discount rates affect NPV
Personalized Insights
2 insights based on your inputs
Negative NPV - Reconsider Project
This investment destroys $2104 in value. Consider alternatives or negotiate better terms.
Payback Period Analysis
You'll recover your initial investment in 3 periods. For liquidity-sensitive projects, shorter payback is preferred.
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Frequently Asked Questions
Use your hurdle rate, cost of capital, or required return for similar-risk projects. Higher risk typically means a higher discount rate.
A PI above 1.0 means the present value of inflows exceeds the initial outflow. Higher values generally indicate more attractive projects.
IRR is the rate that makes NPV zero. NPV tells you the value created at your chosen discount rate. Use both: NPV for absolute value, IRR for a rate comparison.