Net Present Value (NPV) Calculator
Evaluate investments accurately. Discount future cash flows against your firm's cost of capital to definitively measure whether a project will create or destroy shareholder wealth.
Last updated: February 24, 2026
Prefer analyzing investments by percentage yields instead of absolute dollars? Try the IRR Calculator
Your required annualized return.
Upfront capital cost.
Net Present Value (NPV)
A positive NPV means the projected earnings (in present dollars) exceed the anticipated costs. This project will likely add value to the firm.
The Pillars of Capital Budgeting
Because money can earn interest, receiving cash sooner is always preferable. NPV penalizes delayed profits. A $10,000 cash inflow in Year 1 is worth significantly more in present dollars than a $10,000 return in Year 10.
The discount rate you choose represents your alternative options. If you could easily invest $1M into treasury bonds yielding 5% risk-free, then a risky new business venture must be discounted by *at least* 5% to justify taking the capital.
NPV provides arguably the only objective business decision rule: if NPV > 0, accept the project. If NPV < 0, reject it. Positive NPV directly corresponds to an absolute increase in shareholder or personal wealth.
Frequently Asked Questions
Analyzing a Pitch?
Don't get blinded by raw revenue projections. Share this NPV calculator with your board or investment partners to strip away the time distortion and evaluate raw viability.
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