What is NPV (Net Present Value)?

NPV is the present value of all future cash flows from an investment, discounted at a specified rate. A positive NPV indicates the investment is profitable; negative NPV indicates a loss.

What is IRR (Internal Rate of Return)?

IRR is the discount rate at which NPV equals zero. It represents the annualized return on an investment. Compare IRR to your required rate of return to decide whether to invest.

What discount rate should I use?

The discount rate is typically your required rate of return or cost of capital. For students, this is often given in the problem. Common values: 5–10% for bonds, 10–15% for corporate projects, 15–20%+ for startups.

Can I use the NPV/IRR calculator for homework?

Yes. Enter your cash flows, set your discount rate, and click 'Calculate'. The tool shows NPV, IRR, payback period, and a cumulative cash flow chart. Export as PDF for submission.

Free NPV Calculator — Calculate Net Present Value Instantly (No Excel Required)

Enter cash flows and a discount rate to evaluate whether a project creates value.

Best for Evaluating projects, investments, or case-study cash flows using discounted cash flow logic.

Use when You have upfront costs and future cash flows, and need to compare value creation against a required return.

Output includes NPV, IRR, payback period, total undiscounted cash flow, and a cumulative discounted cash flow chart.

Discount rate (%)

Your cost of capital or required return.

Cash flows

Year 0 is usually a negative number (initial investment). Add or remove rows below.

NPV & IRR Analysis

Net Present Value (Project Value Created)

—

Internal Rate of Return

—

Payback period

—

Total undiscounted

—

Cumulative discounted cash flow over time

Shows when the project breaks even and how value builds over time.

Enter cash flows to see results.

What is a Net Present Value (NPV) Calculator?

An NPV calculator, also called a Net Present Value calculator, discounts future cash flows back to today's dollars. It helps you decide whether a project, investment, or business case creates value after accounting for the required return or cost of capital.

This online NPV calculator lets you enter cash flows and a discount rate without building formulas in Excel. It also shows IRR, payback period, total undiscounted cash flow, and a cumulative discounted cash flow chart.

Example NPV Calculation

Suppose a project requires an initial investment of $100,000. It is expected to generate cash flows of $25k to $45k over 5 years, and the discount rate is 10%.

The calculator discounts each annual cash flow back to today's dollars and subtracts the upfront investment. With the default cash flows on this page, the project has a positive NPV, meaning the expected cash flows create value at a 10% required return.

What NPV and IRR tell you

NPV > 0 means the project appears to create value at your discount rate. NPV < 0 means it may not meet the required return.
IRR is the discount rate that would make NPV exactly zero. If IRR > your cost of capital, the project is attractive.
Payback period tells you when undiscounted cash flows turn cumulatively positive. A simpler, cruder signal.

Formulas

NPV = Σ (CFₜ / (1 + r)ᵗ) for t = 0..n

IRR solves: Σ (CFₜ / (1 + IRR)ᵗ) = 0

Caveats

IRR can have multiple solutions if cash flows change sign more than once. We pick the first one we find in a reasonable range.
NPV assumes reinvestment at the discount rate. IRR assumes reinvestment at itself — often unrealistic.
Use MIRR or scenario analysis for messier streams. This tool is for the clean case most homework and first-pass analyses actually have.

Pair with related tools

Complement your capital budgeting analysis with:

Break-Even Calculator — determine minimum sales needed to cover costs.
Monte Carlo Simulator for uncertain cash flows — run scenario analysis on investment outcomes.
SWOT analysis tool for project strategy — organize strengths, weaknesses, opportunities, and threats before committing resources.