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NPV and IRR calculator

Test an investment: its net present value at your hurdle rate, the return it earns, and when it pays back.

NPV · IRR · Payback · Free

Cash flows

The first is the investment, negative
  1. Today
  2. Year 1
  3. Year 2
  4. Year 3
  5. Year 4

Net present value

-21

Earns less than 10%

IRR

8.90%

The rate at which NPV is zero

Payback

2.60 yrs

Discounted: never

Cumulative cash flow

Now123

Profitability index 0.98: the present value of the inflows per unit invested.

How it works

Net present value discounts each cash flow back to today at the rate you choose and adds them up, the initial outlay included at time zero. A positive NPV means the project earns more than that rate.

The internal rate of return is the rate at which NPV is exactly zero: the project’s own return. It is found numerically, the way a spreadsheet does it. A set of flows with no change of sign has no IRR.

Payback is the time until the cumulative cash flow turns positive; discounted payback does the same on the discounted flows. With dates on each flow, XNPV and XIRR count the days between them over a 365-day year.

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