# Net Present Value Calculator

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Instructions:
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Use this Net Present Value Calculator to compute the net present value (\(NPV\)) of a stream of cash flows by indicating the yearly cash flows (\(F_t\)), starting at year \(t = 0\), and the discount rate (\(r\)) (Type in the cash flows for each year from \(t=0\) to \(t = n\). Type '0' if there is no cash flow for a year):

## More about this Net Present Value Calculator (NPV)

The net present value (\(NPV\)) of a stream of cash flows \(F_t\) depends on the discount interest rate \(r\), and the cash flows themselves. It corresponds to the sum of the present values of ALL cash flows associated to a project.

### How do you calculate net present value? What formula do you use?

The net present value (\(NPV\)) can be computed using the following formula:

\[ NPV = \displaystyle \sum_{t=0}^n \frac{F_t}{(1+i)^t} \]where \(F_t\) corresponds to the total sum of cash flows for period \(t\). Such sum can be negative or positive. The factor \((1+i)^t\) in the denominator is part of the discount factor used to bring the value of future cash flows into present values.

### What is NPV discount rate?

The discount rate corresponds to \(i\) in the above equation, and represents the interest rate, or more precisely, the cost of capital, which is used to bring future values into present values.

### How to compute the net present value excel

Excel has a built in function, the =NPV() function that allows you to compute the present value of cash flows.

### What other calculators can I use to evaluate a project?

There are other metrics used to evaluate a projects, which use different angles to assess profitability. You can also use our internal rate of return calculator , the payback period calculator , or our profitability index calculator .