"Net Present Value is today's value for a project's lifetime of cash flows."
This NPV calculator will calculate net present value for a series of cash flows. See Calculate NPV for a discussion of what this means.
You will see two series of cash flows. Each series of cash flows support the net present value results at the bottom. To obtain a NPV for your cash flows, you need to supply the actual cash flows from each project. You will also need to supply the discount rate. Be sure to clear out the numbers to zero for the years not needed. The year column can be changed by just changing the first year. Play close attention to the numbers that you put into your analysis. You don't want the expression "Garbage in, garbage out." to apply to an analysis that you are using to make an important business decision.
Use the net present value as a comparison number between projects. If cash flows are generating a present value higher than the investment, then the highest net present value wins. If you are generating present values of costs with little or no positive cash flow, then you want to chose the lowest present value. More questions?
Listed below are a few possible applications that you might use this business software for:
Once you have used the NPV calculator to calculate net present value for your projects, you can make a rational decision about which project is most economical for your situation.
