Net Present Value (NPV) Calculator

Initial Investment

Discount Rate

%

No.of Years

Nature of Cash Inflows

Amount of Fixed Cash Inflows P.A

Present Value Of Cash Inflows

0

Net Present Value (NPV)

0

What is an NPV calculator?

Net Present Value determines the difference between the present value of future cash flows and your current investment. You can use an NPV or Net Present Value calculator to calculate the current value of your investments. The Navi NPV Calculator calculates the current value of your investments in a jiffy. The online calculator takes into account the revenues, expenses, and capital cost of investments. It helps you determine whether the estimated returns are worth an investment.

How to Calculate NPV?

You could calculate NPV manually. However, manual calculations are time consuming and may not give you accurate results. A better alternative would be using the Navi NPV Calculator. Here’s what you need to do to calculate NPV:

Enter the initial amount of investment

Select the initial investment amount with the slide bar

Enter the discount rate

The discount rate is the rate of interest that is used to discount all future cash flows of an investment

Enter the duration of your investment

Select the number of years of the investment

Select the cash nature of inflows; either fixed or variable

Select the type of cash inflows - fixed or variable and fill up the cash flow for every year

The Navi NPV calculator then displays the net present value and the current value of cash inflows.

What is the NPV formula?

You can use either of the following methods to calculate NPV manually:
NPV = [Cn/(1+r)^n], where n={0-N}
Where the variables represent the following:
Cn is the difference in cash flows, r is the discount rate and n is the time in years.

For example, assume that you make an initial investment of ₹1,00,000 for 5 years at a discount rate of 12% per annum. Assuming the amount of fixed cash inflows per annum to be at ₹10,000, the NPV will be ₹11,048.

A positive NPV represents the ideal situation for making an investment while an investment or project with a negative NPV should not be accepted. A zero NPV represents a neutral situation. You may or may not accept the investment or project.

Advantages of Using the Navi NPV calculator

Here are some of the advantages of Navi’s NPV calculator

User-friendly design

Simple and responsive design for the ease of calculation

Helps determine the worth of your investment

You can get an idea regarding the profitability of your investment before you put your money to work

Helps you plan better

Plan your investments better to stay on top of your goals

Frequently asked questions

NPV or the Net Present Value is calculated to understand the difference between the present value of future cash flows and the amount of the current investment. It is a popular cash budgeting technique that is used to evaluate the suitability of investments and projects.
An analysis of a project’s profitability can be conducted using the net present value method. It also takes into consideration the time value of money. In the future, cash flows will have a lower value than they have today. In other words, the further the cash flows, the lower the value they carry.
In theory, any value above zero is considered a good NPV since the calculation of NPV already takes into consideration factors such as the opportunity cost, investor’s cost of capital, and risk tolerance through the discount rate.
When you compare similar investments, it’s always better to have a higher NPV value. However, when you compare investments of different amounts spanning different periods, the net present value’s size carries less importance. The more amount you invest and for a longer period, the higher will be the NPV.
The net present value is the aggregation of discounted future cash flows. NPV is a useful method for determining whether investments in any project will earn you net profits or losses. Furthermore, a positive NPV will result in profits and a negative NPV will result in losses.
Disclaimer : Navi does not guarantee the accuracy, completeness, or correct sequence of any details provided therein. Therefore no reliance should be placed by the user for any purpose whatsoever on the information contained or data generated herein or on its completeness or accuracy. The use of any information set out is entirely at the user’s own risk.

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