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Net Present Value
NPV Calculator
What is NPV and why does it matter? Net Present Value (NPV) is one of the most powerful tools in business decision-making because it answers a deceptively simple question: "In today's money, is this investment worth more than it costs?" The key insight behind NPV is that money has a time value — a dollar received three years from now is worth less than a dollar in your hand today, because today's dollar can be invested and grow. NPV takes all the future cash flows a project is expected to generate, adjusts each one back to what it is worth in today's terms (using a discount rate), and then subtracts the upfront investment. A positive NPV means the project is expected to create value above and beyond its cost. A negative NPV suggests it destroys value. Businesses use NPV to compare projects, decide whether to proceed with an investment, and determine whether the return justifies the risk.
Step 1 — What rate should we use to value future money?
This is the rate that reflects what your money could earn if invested elsewhere — sometimes called your "cost of capital," "hurdle rate," or "required return." If you're not sure, a common starting point for business decisions is 8–12%. Use the quick-select chips below or enter your own.
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Common reference points — click to use:
Step 2 — What is the upfront investment?
Enter the total cost of getting the project started — the budget, purchase price, capital outlay, or setup costs you pay today before any returns come in. This happens at "time zero" and is not discounted.
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Step 3 — What will come back, and when?
A "period" is usually a year, but can be any consistent unit of time (quarter, month, etc.). For each period, enter the net cash you expect to receive. You can enter a negative number if you expect additional costs in a future period. Add as many periods as your project runs.
| Period | Expected cash flow ($ received) | Label (optional) |
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Cash flow breakdown — nominal vs. present value
Cumulative NPV over time