The Net Present Value (NPV) Calculator in Capexplan helps you evaluate the profitability of an investment or project by calculating the present value of expected cash flows, discounted at a specified rate.
- From the dashboard, go to the Help menu.
- Under the Help section, select Net Present Value Calculator.
- Specify the number of periods over which the cash flows will be evaluated. For example, 10 periods. Enter the discount rate to be used for discounting future cash flows. For example, 5%. And click Start NPV.
- Enter the cash flows for each period. Use negative values for cash outflows (investments) and positive values for cash inflows (revenues).
- Click the Calculate button to compute the NPV based on the entered cash flows and discount rate.
Notes:
- Ensure that all cash flows are entered correctly, with negative values representing cash outflows and positive values representing cash inflows.
- The discount rate is a crucial input, as it reflects the cost of capital and the risk associated with the investment. A higher discount rate will reduce the present value of future cash flows.
