Discounted Cash Flow (NPV) Calculator
Weighing up a project, an acquisition or a new piece of kit? Drop in your initial outlay, the cash you expect each year and a discount rate, and we'll work out the net present value and what every future year is really worth in today's dollars.
- Initial investment$0
- PV of future cash flows$0
- Net present value$0
Enter an investment, a rate and at least one year of cash flow to see your NPV.
Pressure-testing a real decision? We'll build the full model, sensitivities and all, and tell you what the numbers actually mean.
Talk through your numbers →General information only, current for the 2025-26 financial year. This tool is a simplified discounted cash flow model: it ignores tax, inflation, terminal values, financing structure and risk specific to your situation, and is not personal financial or tax advice. For a model you can rely on for a real decision, talk to us.
A Few Things This Calculator Assumes
What does net present value actually mean?
A dollar next year is worth less than a dollar today, because you could have invested today's dollar in the meantime. Net present value (NPV) discounts every future cash flow back to today's value using your discount rate, adds them up, then subtracts what you have to put in now. A positive NPV means the project is expected to earn more than your required return. A negative NPV means it falls short.
How do I pick a discount rate?
The discount rate reflects the return you need to justify the risk. A common starting point for a small business is your weighted average cost of capital, or simply the return you could get on the next best use of the money. Many owners land somewhere between 8% and 15%. The higher the risk, the higher the rate, and the harder it is for the project to clear it. Picking this rate well is most of the art, and exactly the part we help with.
How is each year discounted?
We assume each cash flow lands at the end of its year. Year 1 is divided by (1 plus the rate), year 2 by (1 plus the rate) squared, and so on. The initial investment sits at year 0 and is not discounted. This is the standard approach, but a real model often splits cash flows by month or adds a terminal value for the years beyond your forecast.
Can I enter a negative year?
Yes. If a year costs you money (a big capital top-up, for example) put a minus sign in front of it and it will be discounted as an outflow. The initial investment field is always treated as money out, so you can enter it as a plain positive number.
One Number Should Not Decide a Big Call
A clean DCF is a great start, but real decisions need scenarios, sensitivities and someone to challenge the assumptions. That's the kind of thinking our virtual CFO work is built for.
Free · No lock-in · 2-hour reply guarantee