Fast, Simple & Accurate Online Calculators
Net Present Value Calculator UK
Net Present Value Calculator UK
Calculate Net Present Value
NPV
£
Initial investment amount (enter as positive).
Your required rate of return (e.g., 10%).
£
Cash flow after year 1.
£
Cash flow after year 2.
£
Cash flow after year 3.
£
Cash flow after year 4.
£
Cash flow after year 5.
NPV: The difference between the present value of cash inflows and outflows. Positive NPV = profitable investment.
Example £10,000 investment, 10% rate, £3k, £4k, £5k returns → NPV ~£773
NPV Analysis
Enter your cash flows and discount rate, then click Calculate NPV.
What Is Net Present Value?
Net Present Value (NPV) is the difference between the present value of cash inflows and outflows over a period of time. This net present value calculator UK helps you evaluate the profitability of investment projects.
How to Use the Net Present Value Calculator
Enter your initial investment, your discount rate, and your expected cash flows for years 1-5. Click Calculate NPV to see the net present value and profitability analysis.
How NPV Is Calculated
NPV = Σ(Cash Flow / (1 + Discount Rate)^year) - Initial Investment
Net Present Value Example
Example: £10,000 investment, 10% discount rate, cash flows: £3,000, £4,000, £5,000
- PV Year 1: £3,000 / 1.10 = £2,727
- PV Year 2: £4,000 / 1.10² = £3,306
- PV Year 3: £5,000 / 1.10³ = £3,757
- Total PV: £9,790
- NPV: -£210 (not profitable at 10% rate)
Understanding NPV
- NPV > 0: Investment is profitable
- NPV = 0: Investment breaks even
- NPV < 0: Investment is not profitable
- Higher NPV: More attractive investment
NPV vs IRR vs ROI
- NPV: Shows absolute value of profit in today's money
- IRR: The discount rate where NPV = 0
- ROI: Simple percentage return, ignores time value
Choosing the Discount Rate
- Cost of Capital: The rate you pay for borrowed money
- Required Return: The minimum return you expect
- Risk-Free Rate + Risk Premium: Includes risk factor
- WACC: Weighted Average Cost of Capital
Common NPV Mistakes
- Using wrong discount rate — must reflect investment risk
- Not including all cash flows — include all periods
- Ignoring timing — cash flows may come at different times
- Forgetting terminal value — consider value after the projection period
- Not considering inflation — inflation affects future cash flows
Important: This calculator provides estimates only. Actual investment returns are not guaranteed. Always seek professional financial advice.
Important Assumptions and Limitations
- Assumes cash flows occur at the end of each year
- Does not account for inflation (unless included in discount rate)
- Does not include fees or charges
- Does not account for taxes on returns
- Results are estimates, not guaranteed
Frequently Asked Questions
What is Net Present Value?
+
How is NPV calculated?
+
What is a good NPV?
+
What is the difference between NPV and IRR?
+
What is the difference between NPV and ROI?
+
How do I choose the discount rate?
+
Are the results exact?
+
For investment planning, visit our Investment Calculator UK. For IRR, try our IRR Calculator UK.