1. What does this tool do
This free online investment calculator evaluates cash flows to give you NPV (net present value), IRR (internal rate of return), and ROI. Use it as an NPV calculator or IRR calculator to screen investments or compare projects. Enter an initial investment and future cash flows—see whether the project is profitable and at what effective return. Free and private; no sign-up, all in your browser. Ideal for project screening, deal comparison, or learning how NPV and IRR work.
2. How to use it
Quick start: Enter initial investment (negative) and future cash flows by period, set the discount rate, then view NPV, IRR, and ROI. Adjust inputs to compare scenarios.
- Enter cash flows — List the initial investment (negative) and each period’s cash flow (positive for inflows, negative for outflows). Set the discount rate for NPV.
- View NPV — Net present value at the given discount rate. Positive NPV suggests the investment adds value.
- View IRR — Internal rate of return (the rate that makes NPV = 0). Compare with your required return.
- View ROI — Return on investment from the cash flow series. Use it for a simple profitability check.
3. How it works
NPV = sum of (cash flow at time t / (1 + r)^t). IRR is the rate r that sets NPV to zero, found iteratively. ROI is typically (total inflows − outflows) / outflows or similar, as implemented. All calculations run in your browser; no data is sent to any server.
4. Use cases & examples
- Project screening and investment analysis — Quick NPV and IRR for a set of expected cash flows.
- Compare deals — Same cash flows with different discount rates, or different projects side by side.
- Learning finance — Understand how NPV and IRR respond to changing assumptions.
- Back-of-envelope — No spreadsheet needed; paste or type flows and get results.
Example
- Invest −$1000 now; receive $300, $400, $500 in years 1–3. At 10% discount rate: NPV and IRR from the tool; ROI from total return vs initial outlay.
5. Limitations & known constraints
- No multiple IRR — Cash flows with more than one sign change can have multiple IRRs; the tool may return one or warn. Interpret with care.
- Constant rate — NPV assumes a single discount rate; real analysis may use different rates per period.
- No risk — Results are deterministic; they do not account for probability or risk adjustments.