NPV Calculator - Net Present Value from Cash Flows

Q: How do you calculate net present value?

Use the NPV formula NPV = -C0 + Σ(Ci / (1 + r)^i) . You discount each future cash flow by the required return r and subtract the initial investment C0 .

Q: What is the profitability index?

The profitability index formula is PI = Σ(Ci / (1 + r)^i) / C0 . A PI above 1 usually means the project creates value, while a PI below 1 suggests it destroys value.

Q: How do you calculate NPV in Excel?

In Excel, you can use =NPV(rate, value1, value2, ...) for future cash flows and then add the initial investment separately. A common structure is =NPV(r, C1:Cn) - C0 if C0 is the initial outflow at period 0 .

Calculate net present value from an initial investment, cash flows, and discount rate. Includes NPV formula, profitability index, payback, ROI, and CSV export.

Net present value (NPV) tells you whether an investment creates value: it discounts each future cash flow back to today and subtracts the initial cost. A positive result means the project beats the required return; a negative result means it falls short.

Enter your initial investment, each period's cash flow, and a discount rate or required return. For corporate finance, WACC is often used as the starting point. The calculator returns NPV, profitability index (PI), payback period, discounted payback, ROI, and discounted ROI. Supports annual, semi-annual, quarterly, and monthly cash flows.

To cross-check the result, compare with the IRR calculator.

Net present value formula

$$NPV = -C_{0}+\sum_{i=1}^{t}\frac {C_{i}}{(1+r)^{i}}$$

Profitability index formula

$$PI = \frac{\sum_{i=1}^{t}\frac {C_{i}}{(1+r)^{i}}}{C_{0}}$$

Input

Discount Rate		% Estimate discount rate with WACC
Discount rate mode		Single discount rate Different discount rate for each period
Cash flow frequency		Annually Semi-annually Quarterly Monthly

Year	Cash inflow	Initial investment / cash outflow	Net cash flow	Discount Rate	Discounted Cash Flow
0
Total

Result

Net Present Value (NPV)

0.00

Profitability Index (PI)

0.0000

0PI = 12+

Payback period	-
Discounted payback period	-
Cumulative cash flow	0.00
Cumulative discounted cash flow	0.00
ROI	0.00%
Discounted ROI	0.00%

Initial investment 0.00

PV of future cash flows 0.00

NPV 0.00

Related calculators

Excel / Google Sheets

Place the initial investment as a negative number in B1, then list each period's net cash flow in B2 onward.

NPV

=NPV(rate, B2:B7) + B1

Excel's =NPV() discounts from period 1 — add the period-0 value (B1) separately. Export CSV to download your cash flows in a spreadsheet-ready format.

Discount Rate Explained

The discount rate is the return you require from the project. It can reflect opportunity cost, financing cost, risk, or the minimum hurdle rate needed for the investment to be worthwhile.

In many corporate finance use cases, analysts start with WACC as the base discount rate because it reflects the company’s blended cost of capital. If the project is riskier than the firm’s average activity, the discount rate is often adjusted upward.

A common mistake is to use a borrowing rate or arbitrary percentage without checking whether it matches the actual risk of the cash flows. The lower the discount rate, the higher the present value of future cash flows. The higher the discount rate, the more aggressively those cash flows are discounted.

NPV vs IRR

NPV and IRR are closely related, but they answer different questions. NPV tells you how much value a project adds in money terms, while IRR tells you the rate of return that makes the project break even on a discounted basis.

Metric	What it shows	Best use
NPV	Value created in currency terms	Choosing the project that adds the most value
IRR	Implied percentage return	Comparing returns against a hurdle rate

When projects are mutually exclusive, many analysts give more weight to NPV because it directly measures value creation. IRR is still useful, but unusual cash-flow patterns can make interpretation harder, especially when more than one valid IRR exists.

What Is Net Present Value (NPV)?

How do you calculate net present value?
Use the NPV formula NPV = -C0 + Σ(Ci / (1 + r)^i). You discount each future cash flow by the required return r and subtract the initial investment C0.

What does a positive NPV mean?
A positive NPV means the investment is expected to create value above the chosen discount rate. In other words, the discounted cash inflows exceed the initial outflow.

What discount rate should I use for NPV?
Use a discount rate that reflects the project’s required return and risk. In many business valuation and capital budgeting cases, analysts use WACC as the starting point for the discount rate.

What is the profitability index?
The profitability index formula is PI = Σ(Ci / (1 + r)^i) / C0. A PI above 1 usually means the project creates value, while a PI below 1 suggests it destroys value.

Can I use monthly or quarterly cash flows in this NPV calculator?
Yes. You can switch the cash flow frequency between annual, semi-annual, quarterly, and monthly periods. The calculator then applies the discount rate on a matching per-period basis.

What is the difference between NPV and discounted payback period?
NPV measures the total value created after discounting all cash flows, while discounted payback period measures how long it takes to recover the initial investment using discounted cash flows. NPV focuses on value creation; discounted payback focuses on recovery time.

How do you calculate NPV in Excel?
In Excel, you can use =NPV(rate, value1, value2, ...) for future cash flows and then add the initial investment separately. A common structure is =NPV(r, C1:Cn) - C0 if C0 is the initial outflow at period 0.

What is the difference between NPV and XNPV?
NPV assumes cash flows are equally spaced, such as annual, quarterly, or monthly periods. XNPV uses actual calendar dates, so it is usually better when cash flows happen at irregular times. This calculator supports different cash-flow frequencies and period-by-period discounting.

What is the difference between NPV and IRR?
NPV measures value in currency terms, while IRR measures the implied rate of return. NPV tells you how much value a project adds at a chosen discount rate, whereas IRR tells you the discount rate that makes NPV equal to 0.

Can I export the NPV calculation to CSV?
Yes. The calculator can export the full setup and result to CSV, including the discount rate mode, cash flow frequency, cash flow table, totals, NPV, PI, ROI, and payback metrics.