NPV Calculator

Calculate Net Present Value of investments

Frequently Asked Questions

What is Net Present Value (NPV)?

Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment or project. It calculates the difference between the present value of cash inflows and the present value of cash outflows over a specific period of time.

What does a positive NPV mean?

A positive NPV indicates that the projected earnings generated by a project or investment exceed the anticipated costs, adjusted for inflation and time value of money. If NPV is positive, the project is financially viable and should be accepted.

Why is the time value of money important in NPV?

The time value of money is the concept that money available now is worth more than the same amount in the future due to its potential earning capacity. NPV uses a discount rate to adjust future cash flows back to their present value today.

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