Net present value, internal rate of return, payback and discounted payback for a list of cash flows. Free.
Start with the investment as a negative number (year 0), then the cash you expect each year. Lines or commas both work.
At this rate the project adds value: the cash it returns is worth more than it costs.
NinjaFunction's NPV and IRR Calculator helps you judge a project or investment. Enter a discount rate and a list of cash flows, starting with the investment, and see the net present value, the internal rate of return, the payback period and the discounted payback period. It runs in your browser and stores nothing.
| Year | Cash flow | Value at 10% |
|---|---|---|
| 0 | −1,000 | −1,000.00 |
| 1 | 300 | 272.73 |
| 2 | 400 | 330.58 |
| 3 | 500 | 375.66 |
| 4 | 600 | 409.81 |
| Total (NPV) | 388.77 |
With a 10% discount rate, the example has an NPV of 388.77. The cash it brings back is worth about 389 more than the 1,000 invested, so it clears the 10% hurdle with room to spare. The IRR is about 24.9%, meaning the project itself earns roughly that each year. Simple payback is 2.6 years (the first three years return 1,200 against 1,000), and discounted payback is about 3.05 years.
Net present value is today's value of all the cash a project will bring in, minus what it costs. Future cash is worth less than cash today, so each amount is discounted by the rate you choose. A positive NPV means the project earns more than that rate.
The internal rate of return is the discount rate at which the NPV becomes exactly zero. In plain terms, it is the yearly return the project itself delivers. If it is above your required rate, the project looks worthwhile.
Use the return you could get elsewhere for the same risk. Many companies use their cost of capital. For a personal decision, you might use what a safe investment pays plus an allowance for risk.
IRR needs at least one outflow (negative) and one inflow (positive). If every cash flow has the same sign, or the numbers do not cross zero within a sensible range, there is no solution. Some patterns, such as several sign changes, can also have more than one.
Payback counts how long until the plain cash received covers the investment. Discounted payback does the same after discounting each year's cash, so it is always longer.
Put the first line as the investment, as a negative number, for year 0. Each following line is the cash you expect in the next year. Commas or new lines both work.