Calculate Net Present Value (NPV) and Internal Rate of Return (IRR) for any investment or project. Determine if an investment creates or destroys value.
Cash Flow Analysis
Enter initial investment and annual cash flows
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📅 Annual Cash Flows (add up to 20 periods)
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Net Present Value (NPV)
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IRR
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NPV
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IRR
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Profitability Index
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Payback Period
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FAQ
What is NPV?
Net Present Value (NPV) is the sum of the present values of all cash flows (both inflows and outflows) over the life of a project, discounted at the required rate of return. NPV > 0 = value-creating investment. NPV < 0 = destroys value.
What is IRR?
Internal Rate of Return (IRR) is the discount rate that makes NPV = 0. If IRR > your cost of capital (WACC), the project creates value. IRR is useful for comparing projects of similar risk and duration.
What is the Profitability Index?
PI = (NPV + Initial Investment) ÷ Initial Investment. PI > 1 = good investment. PI = 1.25 means every $1 invested returns $1.25 in present value. Useful for capital rationing when comparing multiple projects.
What discount rate should I use?
Use your WACC (Weighted Average Cost of Capital) for corporate projects, or your required rate of return for personal investments. Common benchmarks: 8-12% for moderate risk, 15-25% for high risk / venture investments.