NPV Calculator India — FY 2025-26
Calculate the net present value of any investment with annual cash flows. For India. Uses current FY 2025-26 data.
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Upfront cost of the investment (negative cash flow)
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Common questions — India
What does it mean if NPV is positive?
Positive NPV means the investment generates returns exceeding your required rate of return (discount rate). It adds value to the business. Negative NPV means the investment doesn't earn enough to justify the cost of capital. Zero NPV means you're exactly breaking even at your required return.
What discount rate should I use?
Use your Weighted Average Cost of Capital (WACC) for business projects. If financed by loan at 12%: use 12–15% (adding risk premium). For personal investments: use your opportunity cost (the return you'd get on the next best alternative). For government projects: discount rates of 8–12% are commonly used in India.
What is the Profitability Index (PI)?
PI = (NPV + Investment) / Investment. PI > 1 means the investment is worth pursuing. PI = 1.3 means every ₹1 invested returns ₹1.30 in present value. Useful when capital is constrained and you need to rank multiple projects — choose highest PI first.
What if cash flows are unequal in real life?
This calculator uses 5-year projections with separate inputs per year — ideal for unequal cash flows. For longer projects, modify the estimate by adding a terminal value in year 5 representing the perpetuity of ongoing cash flows.
Is NPV or IRR better?
NPV is generally preferred by finance professionals because it directly shows value created. IRR can give misleading results for projects with non-conventional cash flows (multiple sign changes). However, IRR is easier to communicate to stakeholders — "this investment returns 24%" is more intuitive than "NPV = ₹3.2 lakh."