Net present value for uneven multi-year cash flows, with IRR, present value of inflows and undiscounted payback.
Uneven flows are fine — just list each year in order. A negative flow (a cost year) is entered with a minus sign.
IRR is the discount rate that would make NPV exactly zero. It is shown when the cash flows change sign (a normal investment pattern).
net present value
How to use this tool
The money put in at the start (year 0). It is not discounted because it happens now.
Your required return or cost of capital, in percent per year. Higher rates shrink the value of distant cash flows.
Comma-separated, year 1 first. Uneven flows are fine, and a cost year is entered as a negative number.
A positive NPV means the project creates value at your discount rate. IRR is the rate that would make NPV exactly zero.
Formula & worked example
Invest $10,000 now and receive $3,000, $4,200 and $6,800 over three years at a 10% discount rate: present values are $2,727.27 + $3,471.07 + $5,108.94 = $11,307.29, so NPV = $1,307.28 (positive). IRR is about 16.34%.
Limitations — read this before you rely on it
NPV is only as good as its forecasts: cash-flow estimates and the discount rate drive the answer, and small changes can flip a borderline NPV. This calculator assumes cash flows arrive at each year-end, uses a single constant discount rate, and ignores taxes, inflation adjustments, terminal value and risk unless you build them into the flows. IRR can be misleading or multiple when cash flows change sign more than once; NPV is the more reliable rule in those cases.
Frequently asked questions
Net present value: today's value of all future cash flows, minus the initial investment. A positive NPV means the project is expected to create value at your discount rate.
Discount each year's cash flow by (1 + r)^t and add them up, then subtract the initial investment. At 10%, $3,000 in year 1 is worth $2,727.27 today.
Any positive NPV creates value at the chosen discount rate; a negative NPV destroys value. The higher the NPV, the more value created — but only if the forecasts are trustworthy.
The internal rate of return: the discount rate that makes NPV exactly zero. If IRR exceeds your required rate, the project passes that test; NPV remains the primary rule when they disagree.
Yes — that is its main strength. Just list each year's flow in order; they do not need to be equal.