Net Present Value (NPV) Calculator
NPV Calculator
Results
Net Present Value (NPV): ₹ -2,41,842.65
Present Value of Cash Inflows: ₹ 7,58,157.35
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What is Net Present Value?
An NPV calculator (Net Present Value Calculator) is a financial tool that helps you evaluate the profitability of an investment or project by calculating the present value of future cash flows, discounted at a specific rate. It’s widely used in capital budgeting, business planning, and investment decision-making.
The net present value calculator allows you to determine whether an investment is likely to generate positive returns over time. A positive NPV suggests the investment is profitable, while a negative NPV indicates a potential loss.
How Does the NPV Calculator Work?
To compute net present value, the calculator requires:
Initial investment amount
Estimated future cash flows for each period
Discount rate (interest or required rate of return)
The formula it uses is:
NPV = ∑ [ Cash flow / (1 + r)^t ] – Initial Investment
Where:
r = discount rate
t = time period
Once inputs are added, the net present value calculator instantly shows whether your investment will add value. It simplifies the complex process of evaluating future cash inflows and adjusting them to today’s value.
Whether you’re evaluating a new project, expansion plan, or asset purchase, this tool makes it easy to compute net present value and make data-driven financial decisions.
Frequently Asked Questions:
A positive NPV indicates that the projected earnings exceed the costs, making the investment potentially profitable
Typically, you should use your required rate of return or cost of capital.
Yes, most npv calculators accept variable cash flows for each time period.
If your discount rate reflects inflation, then yes, it adjusts accordingly.
Absolutely. It’s useful for real estate, business projects, or any decision involving future returns.
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