Impact Tech Solutions · Financial Calculators
NPV / IRR Calculator
Formula Reference
NPV = Σ [CFt ÷ (1+r)t] − Initial InvestmentIRR = the discount rate r at which NPV = 0 (solved iteratively)
Decision rule: accept the project if NPV > 0, or if IRR exceeds your discount rate/cost of capital.
Methodology, interpretation & sources
Purpose. Evaluates a project or investment's cash flows against a discount rate — Net Present Value, Internal Rate of Return, and simple payback period.
Method overview. Net Present Value discounts each future cash flow back to today and subtracts the initial investment. IRR is the discount rate that makes NPV equal to zero. For a conventional project, a positive NPV at the required return indicates value under the stated assumptions.
Worked example. If a project requires Rs. 1,000,000 today and is expected to return Rs. 300,000 annually for five years, the NPV depends on the selected discount rate. Raising the required return lowers the present value of those future receipts.
Interpretation. IRR can be misleading when cash flows change sign more than once or when projects differ greatly in scale or timing. Review the full cash-flow pattern and NPV, not IRR alone.
How to use the result. Start with source data you can verify, enter values on a consistent unit and time basis, and record the assumptions used. The main inputs on this page include Initial Investment (Year 0 Outflow), Discount Rate / Cost of Capital (%), Your Name, Email, Company Name, What Calculator/Tool Do You Need?. Re-run the calculation when those assumptions change rather than carrying an old result forward.
Decision use. Use this tool for scenario planning and comparison rather than as a substitute for professional financial advice. Financial assumptions can change the result materially, so test more than one scenario instead of relying on a single output.
Limitations. Check the time period, rate convention, compounding assumption and cash-flow timing before interpreting the result. Small changes in rates or timing can have a large cumulative effect.
Primary references. Use the current edition/version that applies to your jurisdiction and organization:
- State Bank of Pakistan (financial information)
- Investor.gov — financial calculators and investing basics
Editorial note. Prepared and maintained by Impact Tech Solutions. Editorially updated 28 September 2026. No individual professional credential is claimed on this page; high-consequence, statutory, tax, engineering or health decisions should be independently verified against the current primary source and, where required, a qualified professional.