Net Present Value (NPV) Calculator
Evaluate investment profitability with cash flow analysis.
₹
Money you spend today to start the project.
%
Your expected annual return (e.g., 10%).
Future Cash Flows
Year 1
Year 2
Year 3
Start Calculation
Enter investment and cash flows.
NPV: ₹ 0
Total Cash Inflow
₹ 0
PV of Inflows
₹ 0
Actual vs. Present Value
What is NPV (Net Present Value)?
NPV is the gold standard for making financial decisions. It tells you if an investment is worth making by comparing the Cost (today) with the Future Profits (adjusted for time).
The core concept is the Time Value of Money: ₹100 today is worth more than ₹100 next year because you can invest it today and earn interest.
The Decision Rule
- NPV > 0 (Positive): Accept the Project. It will generate more money than if you had invested elsewhere at the discount rate.
- NPV < 0 (Negative): Reject the Project. You would be better off putting your money in a bank FD or other investment.
- NPV = 0: Indifferent. The project earns exactly your expected return.
The Formula
NPV = [ CF1 / (1+r)^1 ] + [ CF2 / (1+r)^2 ] + ... - Initial Investment
- CF: Cash Flow for a specific year.
- r: Discount Rate (Expected Return).
- n: The year number.