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Calcimator

NPV Calculator

Calculate net present value, IRR, profitability index and discounted payback for a series of periodic cash flows against an up-front investment, with a full per-period discounting schedule.

Inputs

$
$
%
%

Summary

Net present value

$8,881.52

≈ 9 smartphones

IRR12.98
DecisionAccept — positive NPV
PV of inflows$108,881.52
Profitability index1.09
Discounted payback5.37
Total undiscounted inflows$150,000.00
Net, ignoring the time value of money$50,000.00

Cumulative discounted cash flow

Discounted cash flow by period

How to Use This Calculator
  1. Enter the up-front investment and the cash flow you expect in the first period.
  2. Set how many periods the investment runs for and your required rate of return.
  3. Use the growth rate if the cash flows rise or fall each period rather than staying level.
  4. Read the NPV: above zero means the project clears your discount rate. Check IRR and discounted payback alongside it.

How the result changes with Number of periods

Number of periodsNet present value
11$62,376.53
36$141,912.70
65$149,490.18
90$149,952.95

What each input means

Initial investment
Cash out at period zero.
Cash flow per period
Net cash the investment returns in the first period.
Cash flow growth per period
Set above zero for flows that rise each period, below zero for a declining asset.
Number of periods
Usually years. Keep the discount rate on the same basis.
Discount rate
Your required return or cost of capital.
Terminal / salvage value
One-off amount received in the final period, on top of that period's cash flow.

What each result means

Net present value
Positive means the project beats your discount rate.
IRR
The discount rate at which NPV would be exactly zero.
PV of inflows
All future cash flows discounted to today.
Profitability index
PV of inflows per unit invested. Above 1.0 creates value.
Discounted payback
Periods until the discounted cash flows repay the outlay.
Net, ignoring the time value of money
Shown for contrast — the gap against NPV is what discounting costs.

How this is calculated

Formula

NPV = Σ CF_t ÷ (1 + r)^t − initial investment

Worked example, using the default values

  1. Discount each period's cash flow
    PV_t = CF_t ÷ (1 + r)^t
    r = 10%, 6 periods = PV of inflows = $108,881.52
  2. Subtract the initial outlay
    NPV = PV of inflows − initial investment
    $108,881.52 − $100,000 = $8,881.52
  3. Find the rate that makes NPV zero
    IRR: solve NPV(r) = 0
    solved by bisection = 12.98%
  4. Compare value created per pound invested
    PI = PV of inflows ÷ initial investment
    $108,881.52 ÷ $100,000 = 1.089

Engine last updated .

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