How this calculator works
Each future cash flow is discounted to time zero using its distance from the initial outlay. The annual rate is effective; more frequent flows use fractional years consistently. Future flows may be positive receipts or negative payments, with zeros preserving empty periods. This model requires equal spacing and places every future flow at the end of its interval.
Formula
NPV = -initial cost + sum(CF_k/(1+r)^(k/m)), where r is the effective annual discount rate and m is cash flows per year.
Worked example
An initial $1,000 followed by $600 after one year and $600 after two years has NPV $41.32 at 10%. At a zero discount rate, an initial $100 and future flows $60 and $60 give NPV $20.
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Frequently asked questions
What does a positive NPV mean?
The supplied cash flows have a present value above the initial cost at your chosen required return. It does not remove forecast risk.
Can later cash flows be negative?
Yes. Enter signed amounts and include a zero for any interval with no cash flow.
Are dates supported?
Cash flows are equally spaced. Irregular dates require an XNPV-style calculation outside this model.