NPV Calculator
Net present value of a series of cash flows at a discount rate you set, with IRR and payback period alongside it, and the sensitivity that shows how much the answer depends on the rate.
Work it out
Opens on a worked example. Change any line and every figure follows. Cost of goods sold and operating expenses go in before depreciation and amortisation.
Entered positive. It is paid at year 0.
What the money costs you, or could earn elsewhere at similar risk.
Cash flow each year
Optional. Added to the last year.
Runs entirely in your browser. Nothing you enter is sent to us or stored.
Net present value at 8%
318,102.12
- Internal rate of return
- 14.35%
- Payback
- 4.24 years
- Discounted payback
- 5.40 years
How much the answer depends on the rate
| Discount rate | NPV |
|---|---|
| 0% | 910,000.00 |
| 2% | 735,757.05 |
| 4% | 580,678.04 |
| 6% | 442,185.88 |
| 8% | 318,102.12 |
| 10% | 206,578.21 |
| 12% | 106,039.66 |
| 14% | 15,140.60 |
| 16% | -67,273.41 |
Where NPV and IRR disagree about two projects, NPV is right.
Related reading
Where the figures behind a ratio come from, and what it takes to trust them.
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Balance Sheet Reconciliation
Balance sheet reconciliation is the practice of reconciling every balance sheet account, not just cash, on a documented schedule with a named owner and risk tier per account. It is the close deliverable auditors test first, and account reconciliation is the technique it applies, account by account.
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- Free tool
Financial Ratio Calculators
Every ratio from one set of statements.
- Free tool
13-Week Cash Flow Forecast
What a ratio is a snapshot of, week by week.
The formula
NPV = sum over t of CF_t / (1 + r)^t - initial investment
What the number means
NPV answers one question: is this worth more than the money it costs, given what that money could otherwise earn. Positive means yes at the rate you chose. The decision rule is that simple, and almost all of the difficulty is in the inputs.
The discount rate is the whole answer. Change it from 8% to 12% and a project with a long payback can flip from clearly worthwhile to clearly not. The rate should represent what the capital genuinely costs you or what it could earn elsewhere at similar risk, and anyone computing NPV at a round number they chose because it seemed reasonable should look at the sensitivity table before presenting the result. The tool shows NPV across a range of rates for exactly this reason, and the useful output is often "positive above 9%, negative below" rather than a single figure.
IRR is the rate at which NPV is zero, and it is reported here because people ask for it. It is less reliable than NPV: it can have multiple solutions when cash flows change sign more than once, it is undefined for some series, and it implicitly assumes reinvestment at the IRR itself, which is usually optimistic. Where IRR and NPV disagree about which of two projects is better, NPV is right.
Payback period ignores everything after the payback point and the time value of money entirely, which makes it a poor decision rule and a useful sanity check.
A worked example
A plant automation investment: $1.4 million upfront and $330,000 of savings a year for seven years. NPV is $318,102.12 at 8% and $15,140.60 at 14%: clearly positive at one rate and marginal at the other, so the conclusion is about the rate rather than about the machine. The IRR is 14.35%, and the sensitivity table shows exactly where the answer turns. Payback is 4.24 years, or 5.40 discounted at 8%.
Ratios are downstream
of the close.
Connected accounts, reconciled at zero tolerance, with statements for any period and any entity. Your team approves what the agents propose, and the numbers the ratios come from are ones you can sign.