Procurement tools
NPV calculator
Discount a project’s cash flows back to today’s rupees at your cost of capital, and see whether the number that comes out the other end still says yes.
Formula
NPV = −Initial Investment + Σ CFt ÷ (1 + r)t
Project inputs
Initial investment
Upfront outlay at period 0
₹
Discount rate
Your cost of capital or required return
%
Cash flows by period
Year 1
₹
Year 2
₹
Year 3
₹
Year 4
₹
Year 5
₹
Year 6
₹
Net present value
₹0
Verdict–
Profitability index–
Discounted payback–
Enter 0 for any year with no cash flow — those years are simply ignored in the total. A positive NPV means the project returns more than your discount rate demands and creates value; a negative NPV means the capital would earn more sitting in whatever your discount rate represents. Profitability index above 1.0 confirms the same signal on a per-rupee-invested basis; discounted payback shows how many years it takes the discounted inflows to cover the initial outlay.
Frequently asked questions
What is NPV?
Net present value is today’s value of all a project’s future cash flows, discounted at your required rate of return, minus the initial investment. It tells you whether a project is expected to create or destroy value.
What discount rate should I use?
Most organisations use their weighted average cost of capital, or a hurdle rate that reflects the project’s risk. A higher discount rate makes future cash flows worth less today.
What does a positive or negative NPV mean?
Positive means the project is expected to return more than your discount rate demands and creates value. Negative means the capital would be better deployed elsewhere at that same rate of return.
Is this NPV calculator free to use?
Yes. It runs entirely in your browser, needs no account, and nothing you enter is stored or transmitted.