The
Net Present Value (NPV) Calculator:
The calculation
of
net present value is useful when
preparing a capital budgeting project. With this calculator, you can
determine whether the total
present
value of a project's expected future cash flows is enough to satisfy
the initial cost.
In the calculator fields below enter your required
discount
rate, also known as the
cost
of capital or required rate of return. This is the return you
require for the project to be an attractive investment. Secondly,
enter the length of the project (in years) and the amount required
to initiate the project. Finally, enter any projected net cash flows
to be received throughout the life of the project. (If you project
any cash outflows to be greater than inflows, enter a negative number
for that net cash flow.)
If you are using the calculator to compare projects, enter in each
project's cash flows separately.
