Present Value of Cash Flows Calculator

Each cash flow is discounted by PV = CF ÷ (1 + r)^t, where r is your discount rate and t is the number of periods until that cash flow occurs. NPV is simply the sum of all those discounted cash flows, including an initial investment (usually entered as a negative number in period 0).

Commonly your cost of capital, required rate of return, or a benchmark like your weighted average cost of capital (WACC) for business investment decisions — or a personal opportunity-cost rate for individual decisions. A higher discount rate values near-term cash flows more heavily and reduces the present value of distant ones.

A positive NPV means the investment is expected to generate more value (in today's dollars) than it costs at your chosen discount rate — generally a good sign. A negative NPV means the opposite — the investment doesn't clear your required rate of return.

This is a general-purpose NPV tool for any series of cash flows (a business investment, a project, a series of payments) — the Present Value of Lease Payments Calculator is specifically built around ASC 842 lease accounting conventions (annuity-due vs. ordinary annuity timing).

IRR is the discount rate at which the NPV of your cash flow series equals exactly zero — it represents the annualized return the investment itself generates. If IRR is higher than your required rate of return (discount rate), the investment clears your hurdle (equivalent to a positive NPV); if lower, it doesn't.