How to calculate One-year NPV
The One-year NPV formula, with plain worked examples you can check yourself.
One-year NPV = CF ÷ (1 + r) − I
Worked examples
CF = 5830 · r = 10% · I = 5000One-year NPV = 300
CF = 1440 · r = 20% · I = 1000One-year NPV = 200
CF = 3630 · r = 10% · I = 3000One-year NPV = 300
How to use it
- Write down the values for each letter in the formula.
- Do the brackets first, then divide or multiply.
- Check the units before you compare results.
- Compare the answer with last period or with a competitor to see if it is good or bad.
This formula belongs to Valuation & Deals.
Related terms
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