NPV = Sum of (Cash Flow / (1+r)^t) − Initial Investment. Positive NPV = value-creating investment.
NPV > 0 means the investment returns more than the discount rate.
Common discount rates: 8–12% for corporate projects, 7% for stock market benchmark.
Reach for this tool whenever a financial decision hinges on this type of calculation. Small differences in rate or term become large differences in total cost or return over multi-year horizons — differences that only become visible when you run the actual numbers.
The most consequential mistake is comparing financial figures that are not on the same basis — gross versus net, before-tax versus after-tax, or nominal versus inflation-adjusted. Always check whether figures you are comparing use the same definition.
A first-time buyer models three scenarios before making an offer: 10%, 15%, and 20% deposit on a £280,000 property. The calculator shows exactly how the monthly payment and total interest cost change with each deposit level, making the decision visible rather than speculative.
A positive NPV means the investment is expected to generate more value than its cost at the given discount rate.
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