About this calculator
Enter your required return as the discount rate, the investment as a negative amount in year 0, and the cash flows you expect in later years.
How to use it
- Enter the discount rate.
- Enter the investment in year 0 as a negative number.
- Enter the cash flows for later years.
The formula
NPV = Σ cash flow in year t ÷ (1 + r)t
- r
- the discount rate: the return you need
- t
- the year, 0 for today
Worked example
The same ₹5 lakh project at a 10% discount rate
- Discounting each year’s cash flow at 10% and adding them gives an NPV of ₹32,839.
- A positive NPV means the project beats a 10% return; its IRR is 12.56%.
What the result means
NPV is in rupees, so it shows how much value a project adds, not just its rate of return.
Assumptions
- Cash flows arrive at the end of each year.
Limitations
- The result depends heavily on the discount rate you choose.
Frequently asked questions
What discount rate should I use?
Your cost of borrowing, or the return you could get on a similar-risk investment.
Is a higher NPV always better?
Among projects of similar size and risk, yes.
What does a negative NPV mean?
The project returns less than your discount rate.
For information only. This calculator gives estimates based on the figures you enter and the assumptions listed above. It is not financial advice. Actual amounts depend on the lender’s or institution’s terms, fees, rounding and rate changes. Please confirm with them before you decide.
Last reviewed on 1 October 2026. Found a mistake? Tell us.