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Net present value calculator

Discount each cash flow to time zero and add the results. Enter the initial cash flow first, including its sign.

Omni Finance AcademyBy Omni Finance Academy
Net present value
-21.0368

The first value belongs to time zero

An amount paid immediately is already a present value. A purchase of 1,000 therefore enters as −1,000 when later amounts are receipts. The next value is one period away, the following value two periods away, and so on. Keep the interval between entries consistent.

Choose a rate for the same interval

If the cash flows are annual, use the discount rate per year. If they are monthly, use a compatible monthly rate. Uneven amounts are supported, but irregular calendar dates are not represented by this equally spaced model.

NPV=∑t=0TCFt(1+r)tNPV=\sum_{t=0}^{T}\frac{CF_t}{(1+r)^t}

The first amount has t = 0. The discount rate r applies to one cash-flow interval.

Interpret NPV under the stated assumptions

The default amounts −1,000, 300, 400 and 500 discounted at 10% give approximately −21.0376. The discounted receipts total less than the initial outflow. This is a result of these cash flows and this chosen rate; a different cash-flow forecast or discount rate changes the result.

Further references