Calculate net present value of future cash flows with customizable discount rate, investment period, and sensitivity analysis.
An NPV result answers whether a timed series of expected cash flows is worth more or less than the amount invested today. Enter the initial investment, discount rate, investment period, and cash flow for each period. The calculator discounts each future amount to time zero, sums those present values, and nets the initial outlay. Sensitivity analysis shows how changes in assumptions affect the result. The common timing mistake is treating the initial investment as a year-one cash flow. A time-zero outlay is not discounted.
A concrete input and expected output from the current implementation.
Input
Initial investment: $100 Discount rate: 10% per year Investment period: 1 year Year 1 cash flow: $110
Expected output
Net present value: $0.00
The year-one cash flow has a present value of $110 / 1.10 = $100. Subtracting the $100 initial investment gives an NPV of exactly $0.00.
A cash flow in period t contributes CF(t) / (1 + r)^t, where r is the discount rate per period. The initial investment belongs at period zero, so it retains its full value. Positive and negative flows are added with their signs. The resulting NPV expresses the entire schedule's value at the beginning of the investment period.
The discount rate and cash-flow spacing must use the same period. Annual cash flows require an annual rate, while monthly cash flows require a monthly rate. Later entries receive more discounting because their exponents are larger. Each sensitivity result is conditional: it is valid only for the particular rate and cash-flow assumptions represented by that case.
If the calculator provides a dedicated initial-investment field, enter the outlay in the form that field requests; it is normally deducted from discounted future cash flows. If the investment is instead entered as a period-zero cash flow, represent an outflow with a negative sign. Do not enter it negatively and subtract it again.
No. It means the investment adds value under the cash flows, timing, and discount rate entered. The decision can still depend on forecast risk, financing constraints, taxes, liquidity, strategic considerations, and alternatives excluded from the calculation. Sensitivity results help expose assumption risk, but they do not establish probabilities or guarantee an outcome.
The example and behavioral notes were checked against the browser implementation. Standards and primary references below define the relevant format, formula, or platform behavior.
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