This calculator provides the user with the net present value of a series of cash flows. The difference between this tool and our present value calculator is its ability to handle cash flows of varying amounts. This calculator only requires three types of inputs to compute the net present value: the discount rate, cash flows coming in, and cash flows going out.
The variables used in our online calculator are defined in detail below, including how to interpret the results.
This calculator is able to accommodate up to 20 years of cash flow, plus an investment in the starting year. All cash flows should be stated in nominal dollars, which are dollars that are not adjusted for inflation. Cash Flow In dollars are flowing to the investor, and should be stated in terms of positive values. Cash Flow Out dollars are flowing away from the investor, and should be stated in terms of negative values. For example, an initial investment of $10,000 in Year 0 would appear in the Cash Flow Out column as -10,000.
This is the net present value of the investment, including all of the associated cash flows. Traditionally, the investment would appear as a negative value in the Cash Flow Out column for Year 0. Subsequent cash flows in each of the next 20 years are then discounted to their present value.
Net Present Value Calculator - Copyright © 2010 - 2015 Money-Zine.com (Last Reviewed on January 30, 2015)
Disclaimer: These online calculators are made available and meant to be used as a screening tool for the investor. The accuracy of these calculations is not guaranteed nor is its applicability to your individual circumstances. You should always obtain personal advice from qualified professionals.