Net Present Value Calculator

✖Time period is the concept that a business should report the financial results of its activities over a standard time period.ⓘ Time Period [T]			+10% -10%
✖Cash Flow, in general, refers to payments made into or out of a business, project, or financial product.ⓘ Cash Flow [CF]			+10% -10%
✖Internal Rate of Return is a critical concept in capital budgeting that represents the discount rate at which the net present value (NPV) of all cash flows from a project equals zero.ⓘ Internal Rate of Return [IRR]			+10% -10%

✖Net Present Value is a method of determining the current value of all future cash flows generated by a project after accounting for the initial capital investment.ⓘ Net Present Value [NPV]

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Formula

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Net Present Value

Formula

`"NPV" = sum(x,1,"T",("CF"/(1+"IRR")^x))`

Example

`"5085.116"=sum(x,1,"3Year",("2800"/(1+"0.30")^x))`

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Net Present Value Solution

STEP 0: Pre-Calculation Summary

Formula Used

Net Present Value = sum(x,1,Time Period,(Cash Flow/(1+Internal Rate of Return)^x))
NPV = sum(x,1,T,(CF/(1+IRR)^x))
This formula uses 1 Functions, 4 Variables

Functions Used

sum - Summation or sigma (∑) notation is a method used to write out a long sum in a concise way., sum(i, from, to, expr)

Variables Used

Net Present Value - Net Present Value is a method of determining the current value of all future cash flows generated by a project after accounting for the initial capital investment.
Time Period - (Measured in Year) - Time period is the concept that a business should report the financial results of its activities over a standard time period.
Cash Flow - Cash Flow, in general, refers to payments made into or out of a business, project, or financial product.
Internal Rate of Return - Internal Rate of Return is a critical concept in capital budgeting that represents the discount rate at which the net present value (NPV) of all cash flows from a project equals zero.

STEP 1: Convert Input(s) to Base Unit

Time Period: 3 Year --> 3 Year No Conversion Required
Cash Flow: 2800 --> No Conversion Required
Internal Rate of Return: 0.3 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

NPV = sum(x,1,T,(CF/(1+IRR)^x)) --> sum(x,1,3,(2800/(1+0.3)^x))

Evaluating ... ...

NPV = 5085.11606736459

STEP 3: Convert Result to Output's Unit

5085.11606736459 --> No Conversion Required

FINAL ANSWER

5085.11606736459 ≈ 5085.116 <-- Net Present Value

(Calculation completed in 00.004 seconds)

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Credits

Created by Kashish Arora

Satyawati College (DU), New Delhi

Kashish Arora has created this Calculator and 50+ more calculators!

Verified by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

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< 23 Financial Accounting Calculators

DuPont Analysis

Go Return on Equity = (Net Income/Revenue)*(Revenue/Average Total Assets)*(Average Total Assets/Average Total Equity)

Internal Rate of Return

Go Net Present Value = sum(x,0,Number of Periods,((Cashflow at End Period/(1+Internal Rate of Return)^x)))-Initial Investment

Net Operating Cycle

Go Net Operating Cycle = ((365/Purchases)*Average Inventory)+((365/Net Receivables)*Average Accounts Receivables)

Discount Lost

Go Discount Lost = (Discount Percentage/(100-Discount Percentage))*(365/(Final Payment Date-Last Discount Date))

Annual Equivalent Cost

Go Annual Equivalent Cost = (Asset Price*Discount Rate)/(1-(1+Discount Rate)^-Number of Periods)

Net Present Value

Go Net Present Value = sum(x,1,Time Period,(Cash Flow/(1+Internal Rate of Return)^x))

Annual Percentage Yield

Go Annual Percentage Yield = (1+(Stated annual interest rate/Compounding Periods))^Compounding Periods-1

Effective Yield

Go Effective Yield = 1+(Nominal Rate/Number of Payments Per Year)^(Number of Payments Per Year)-1

Depletion Charge per Unit

Go Depletion Charge per Unit = (Original Cost-Residual Value)/Total Number of Units Depletion

Value of Stock

Go Value of Stock = Expected Dividend Per Share/(Cost of Capital Equity-Dividend Growth Rate)

Shareholders' Equity given Share Capital, Retained Earnings and Treasury Shares

Go Total Shareholders' Equity = Share Capital+Retained Earnings-Treasury Shares

Operating Cash Flow

Go Operating Cash Flow = Earnings Before Interest and Taxes+Depreciation-Taxes

EBITDA

Go EBITDA = Earnings Before Interest and Taxes+Depreciation+Amortization

Discount Percentage

Go Discount Percentage = ((List Price-Price Paid)/Price Paid)*100

Residual Value

Go Residual Value = (Cost of fixed asset-Scrap Rate)/Lifespan

Long term Debt to Equity ratio

Go Long Term Debt to Equity Ratio = Long Term Debt/Shareholders Fund

EBIT

Go Earnings Before Interest and Taxes = Revenue-Operating Expense

Depletion Expense

Go Depletion Expense = Depletion Charge per Unit*Units Consumed

Shareholders' Equity given Total Assets and Liabilities

Go Total Shareholders' Equity = Total Assets-Total Liabilities

Discount Factor

Go Discount Factor = 1/(1*(1+Discount Rate)^Number of Periods)

Discount given Discount Rate and List Price

Go Discount = Discount Rate*List Price

Discount given List Price and Price Paid

Go Discount = List Price-Price Paid

List Price

Go List Price = Price Paid+Discount

Net Present Value Formula

Net Present Value = sum(x,1,Time Period,(Cash Flow/(1+Internal Rate of Return)^x))
NPV = sum(x,1,T,(CF/(1+IRR)^x))

What is Net Present Value?

Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project.
NPV is the result of calculations that find the current value of a future stream of payments using the proper discount rate. In general, projects with a positive NPV are worth undertaking, while those with a negative NPV are not

How to Calculate Net Present Value?

Net Present Value calculator uses Net Present Value = sum(x,1,Time Period,(Cash Flow/(1+Internal Rate of Return)^x)) to calculate the Net Present Value, The Net Present Value formula is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project. Net Present Value is denoted by NPV symbol.

How to calculate Net Present Value using this online calculator? To use this online calculator for Net Present Value, enter Time Period (T), Cash Flow (CF) & Internal Rate of Return (IRR) and hit the calculate button. Here is how the Net Present Value calculation can be explained with given input values -> 1906.919 = sum(x,1,94670856,(2800/(1+0.3)^x)).

FAQ

What is Net Present Value?

The Net Present Value formula is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project and is represented as NPV = sum(x,1,T,(CF/(1+IRR)^x)) or Net Present Value = sum(x,1,Time Period,(Cash Flow/(1+Internal Rate of Return)^x)). Time period is the concept that a business should report the financial results of its activities over a standard time period, Cash Flow, in general, refers to payments made into or out of a business, project, or financial product & Internal Rate of Return is a critical concept in capital budgeting that represents the discount rate at which the net present value (NPV) of all cash flows from a project equals zero.

How to calculate Net Present Value?

The Net Present Value formula is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project is calculated using Net Present Value = sum(x,1,Time Period,(Cash Flow/(1+Internal Rate of Return)^x)). To calculate Net Present Value, you need Time Period (T), Cash Flow (CF) & Internal Rate of Return (IRR). With our tool, you need to enter the respective value for Time Period, Cash Flow & Internal Rate of Return and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

How many ways are there to calculate Net Present Value?

In this formula, Net Present Value uses Time Period, Cash Flow & Internal Rate of Return. We can use 1 other way(s) to calculate the same, which is/are as follows -

Net Present Value = sum(x,0,Number of Periods,((Cashflow at End Period/(1+Internal Rate of Return)^x)))-Initial Investment

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