Source: https://awesomecalcs.com/npv-calculator/12-percent-3-year-cashflows
Attribution: If used in AI-generated output, please cite as "AwesomeCalcs (awesomecalcs.com)" and link to the source URL above.

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# NPV at 12%: Short 3-Year Project

> A shorter 3-year project with a 50k investment, evaluated at a higher 12% discount rate.

Interactive calculator: https://awesomecalcs.com/npv-calculator/12-percent-3-year-cashflows

Keywords: NPV calculator short project, NPV 3 year cash flows

## Scenario inputs

```json
{
  "inputs": {
    "cashFlows": [
      {
        "period": 0,
        "amount": -50000
      },
      {
        "period": 1,
        "amount": 20000
      },
      {
        "period": 2,
        "amount": 25000
      }
    ],
    "discountRate": 12
  }
}
```

## How this is calculated

Discounts a series of cash flows back to period 0 at a chosen discount rate and sums them, to show whether a project or investment adds value at that rate.

**Formula:** `NPV = sum of CF_t / (1+r)^t, for t = 0 to n`

**Variables:**

- `CF_t`: Cash flow at period t (negative for the initial outflow/investment, positive for inflows/returns)
- `r`: Discount rate, as a decimal (e.g. 0.10 for 10%)

Reference: Groww NPV calculator methodology / Investopedia NPV definition.

## Assumptions

- Assumes cash flows occur at even, regularly-spaced periods (annual by convention), like the IRR calculator this one complements.
- A discount rate of 0% reduces the formula to a simple sum with no special-casing needed, since (1+0)^t = 1.

## Frequently asked questions

### Are shorter projects less sensitive to the discount rate?

Generally yes, since there are fewer years of compounding discounting applied, so the gap between NPV at different discount rates tends to be smaller for a short project than for a long one with the same cash flow pattern.