NPV Calculator
Net present value with a full discounting table — the gold-standard test of whether a project creates value.
Free · No signup · By the analysts at Blackridge Research · Updated 2026-07-18
Inputs
Results
What this means
Adjust the inputs to calculate.
About the NPV Calculator
Net Present Value (NPV) is the sum of all future cash flows discounted to present value, minus the initial investment.
It is the gold-standard test of whether a project creates or destroys value.
Formula
NPV = Σ(CFₜ / (1 + r)ᵗ) - Initial Investment
- CFₜ
- — Cash Flow at time t
- r
- — Discount Rate
- t
- — Time period
How to use this calculator
- 1
Enter initial investment
The upfront cost of the project.
- 2
Enter annual cash flows
The expected annual net cash flow from the project.
- 3
Enter discount rate
The required rate of return or cost of capital.
- 4
Enter project years
The expected life of the project in years.
Example calculations
Equipment purchase decision
A company is considering buying equipment for $100,000 that will generate $25,000 annually for 5 years at a 10% discount rate.
NPV = -$100,000 + $25,000/1.1 + $25,000/1.1² + ... + $25,000/1.1⁵ = -$5,237. The project destroys value.
- Net Present Value:
- -$5,237
- Profitability Index:
- 0.95×
- Total Cash Flows:
- $125,000
The project destroys $5,237 of value at a 10% discount rate.
Interpreting your results
Positive NPV: The project creates value and should be accepted.
Negative NPV: The project destroys value and should be rejected.
The profitability index (NPV + Investment) / Investment shows value created per dollar invested.
Need the market data behind this calculator?
The NPV Calculator is only as good as its inputs. Blackridge Research publishes syndicated market reports with vetted market sizes, growth rates, and competitive landscapes across 40+ industries — and builds custom studies when the shelf report doesn't exist.
Industry applications
Business
- Capital budgeting: evaluate investment projects.
- M&A analysis: value acquisition targets.
- Project selection: prioritize projects by NPV.
Construction
- Construction projects: evaluate the financial viability of projects.
- Equipment purchases: assess the value of capital equipment investments.
Research
- Feasibility studies: NPV is the standard metric for project viability.
- Investment analysis: evaluate research project returns.
Common mistakes to avoid
-
✗ Using the wrong discount rate
The discount rate should reflect project risk, not the company's cost of capital.
-
✗ Ignoring terminal value
For projects with residual value, include it in the final year's cash flow.
Frequently asked questions
›What discount rate should I use?
Use the project's cost of capital or required rate of return, which reflects its risk.
›Is NPV better than IRR?
NPV is the gold standard. IRR is useful but can have multiple solutions.
Glossary
- NPV:
- Net Present Value — the sum of discounted cash flows minus initial investment.
- Discount rate:
- The rate used to discount future cash flows to present value.
- Profitability index:
- Value created per dollar invested: (NPV + Investment) / Investment.
Explore more free tools
IRR Calculator
Internal rate of return — the discount rate that makes NPV zero. The metric investors compare to their hurdle rate.
Payback Calculator
How many years until the investment pays back? The simplest, most intuitive test of project risk.
DCF Calculator
Discounted cash flow — value a stream of future cash flows in today's money. The bedrock of valuation.
Company Valuation Calculator
Estimate enterprise value and equity value using revenue and EBITDA multiples — the standard VC and M&A method.