NPV Calculator

Display currencyFormatting only. This does not change the calculation.

What do you have?

Cash flows, first period firstThe first value is period 0 and is not discounted. Outflows are negative, inflows positive.

Discount rate per period (%)The rate for ONE period of the series. If the flows are annual this is the annual rate; if monthly, the monthly rate.

Present value of the future inflowsProfitability-index mode only: the already-discounted value of everything the project returns.

Initial investmentProfitability-index mode only: the outlay at the start, entered as a positive number.

Net present value

16,986.54

NPV Calculator

Profitability index

1.1699

Present value of inflows

116,986.54

Present value of outflows

100,000.00

Internal rate of return

17.0937 %

Discounted payback (periods)

3.447

Sum of the undiscounted flows

50,000.00

NPV rule

Accept: NPV is positive at this discount rate

Worked out from Brealey, Myers & Allen, Principles of Corporate Finance, ch. 2 and 5 - the net present value rule and the definition NPV = sum CF_t/(1+r)^t with CF_0 undiscounted and 1 other source.

The rate entered is the rate for one period of this series. Mixing an annual rate with monthly flows overstates the discounting twelvefold.

How this is worked out

9 steps

Discount factor for period t = 1 / (1 + 0.1)^t, so period 0 is undiscounted.
t=0: -100000 x 1 = -100000 (running total -100000).
t=1: 30000 x 0.90909091 = 27272.7273 (running total -72727.2727).
t=2: 35000 x 0.82644628 = 28925.6198 (running total -43801.6529).
t=3: 40000 x 0.7513148 = 30052.592 (running total -13749.0609).
t=4: 45000 x 0.68301346 = 30735.6055 (running total 16986.5446).
NPV = 16986.544635.
The IRR is the rate that drives this same sum to zero: 17.093686% a period.
Profitability index = PV of inflows / PV of outflows = 116986.5446 / 100000 = 1.169865.

Period-by-period discountingtable

period	cashFlow	discountFactor	presentValue	cumulativePresentValue
0	-100,000	1	-100,000	-100,000
1	30,000	0.909091	27,272.727273	-72,727.272727
2	35,000	0.826446	28,925.619835	-43,801.652893
3	40,000	0.751315	30,052.592036	-13,749.060856
4	45,000	0.683013	30,735.605491	16,986.544635

Results are general information, not financial, tax, legal, medical or engineering advice.