# NPV Calculator

> Calculate Net Present Value (NPV) of a series of annual cash flows. Returns the present value of each year's cash flow, the total PV, and the resulting NPV with an accept-or-reject style note.

**URL:** https://www.calculatoranswers.com/npv-calculator
**Category:** Money

## Quick Answer

Calculate the net present value (NPV) of an investment with a series of cash flows over time, helping determine project profitability.

## Definition

A net present value (NPV) calculator is a financial tool used in capital budgeting to determine the profitability of an investment by comparing the present value of expected cash inflows with the present value of cash outflows. It discounts a series of future annual cash flows back to the present day using a specified discount rate or hurdle rate. A positive NPV indicates that the projected earnings exceed the anticipated costs, making the project financially viable, while a negative NPV suggests a net loss. Corporate analysts use it to compare capital projects.

## How to Use

1. **Input Initial Cost** — Enter the initial capital investment required for the project or asset.
2. **Set Discount Rate** — Type the annual discount rate or cost of capital as a percentage.
3. **Enter Annual Cash Flows** — Input the expected cash inflows or outflows for each individual year of the investment.
4. **Calculate NPV** — Review the final net present value and the discounted value of each year's cash flows.

## Disclaimer

This calculator provides estimates for educational and planning purposes. Always consult a qualified professional for specific advice on financial, medical, legal, or other regulated decisions.

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