MCPCalc

NPV Calculator

Calculate the net present value of future cash flows for investment decisions.

Scratchpad (not saved)

$

Upfront cost of the investment (entered as positive)

%

Required rate of return / cost of capital

Cash Flows
$

Expected cash flow in year 1

$

Expected cash flow in year 2

$

Expected cash flow in year 3

$

Expected cash flow in year 4

$

Expected cash flow in year 5

What This Calculator Does

Calculate the net present value of future cash flows for investment decisions.

It combines Initial Investment, Discount Rate, Year 1 Cash Flow, Year 2 Cash Flow to estimate Net Present Value (NPV), Profitability Index, Initial Investment.

Formula & Method

Core equations: Net present value discounts each future cash flow: NPV = -I_0 + \sum_{i=1}^{n} \frac{CF_i}{(1 + r)^i} where I_0 is the initial investment, CF_i is the cash flow in period i, and r is the discount rate. The profitability index is: PI = \frac{NPV + I_0}{I_0} Inputs are applied in base units, then derived metrics are computed from the same equations and rounded for display.

Notation used in the formulas: R = Net Present Value (NPV); x_{1} = Initial Investment; x_{2} = Discount Rate; x_{3} = Year 1 Cash Flow; x_{4} = Year 2 Cash Flow; x_{5} = Year 3 Cash Flow; x_{6} = Year 4 Cash Flow.

Method summary: inputs are normalized to consistent units, core equations are evaluated, then secondary values are derived and rounded for display.

Use this calculator for quick scenario analysis. Start with baseline values, change one driver at a time, and compare how sensitive the results are to each input shown above.

Inputs Used

  • Initial Investment: Upfront cost of the investment (entered as positive)
  • Discount Rate: Required rate of return / cost of capital
  • Year 1 Cash Flow: Expected cash flow in year 1
  • Year 2 Cash Flow: Expected cash flow in year 2
  • Year 3 Cash Flow: Expected cash flow in year 3
  • Year 4 Cash Flow: Expected cash flow in year 4
  • Year 5 Cash Flow: Expected cash flow in year 5

Related Calculators