Net Present Value Calculator
Calculate the net present value (NPV) of an investment given its upfront cost, expected future cash flows, and a discount rate.
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Your result
₹68,618.02
Net present value
AI explanation
Formula
NPV = −initial investment + sum(cash flow_t / (1+r)^t)Worked example
₹5L investment, ₹1.5L/year for 5 years, 10% discount rate
| Field | Value |
|---|---|
| Initial investment | 500000 |
| Future cash flows | 150000, 150000, 150000, 150000, 150000 |
| Discount rate | 10 |
| Net present value | 68618.02 |
| Profitable at this discount rate? | true |
Assumptions
- Assumes cash flows occur at regular, evenly-spaced intervals (e.g. annually).
- A positive NPV means the investment is expected to exceed the discount rate (your required return or cost of capital); a negative NPV means it's expected to fall short.
- Informational only.
Frequently asked questions
What does a positive NPV mean?
A positive NPV means the investment's future cash flows, discounted back to today, exceed the initial cost — the investment is expected to add value above your chosen discount rate.
How do I choose a discount rate?
Common choices include your cost of capital, a comparable investment's expected return, or a personal required rate of return that reflects the investment's risk level.
How is NPV different from IRR?
NPV gives a rupee value at a chosen discount rate. IRR instead solves for the rate at which NPV equals zero — both use the same discounted cash flow logic, viewed from different angles.
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Sources
- Mutual Fund Systematic Investment Plans — Securities and Exchange Board of India (SEBI). Effective 01-01-2020, reviewed 13-09-2026.
This calculator provides a general estimate only and does not constitute investment advice.
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