Investment appraisal, NPV, IRR and payback
Investment appraisal simulation
Is it worth investing? Net present value, return and payback
The tool appraises a business investment starting from the amount, the duration (1 to 20 years) and first-year revenue, with optional costs. It calculates net present value (NPV), internal rate of return (IRR), modified IRR, payback, including discounted payback, and the profitability index, and compares them across three scenarios. The calculation runs in your browser and the result is always visible. The data you enter are neither sent nor stored unless you request the report, in which case they are kept for 12 months. The report is sent to the address you provide. Subscribing to the newsletter is optional.
The online calculation is an estimate. The optional PDF report adds the comparison of the scenarios, the year-by-year cash flows, the disposal at the end of the period, the assumptions, the warnings and the legal references.
The calculator
How the calculation works
The indicators
NPV is the sum of cash flows discounted at the discount rate, less the investment; IRR is the rate that brings NPV to zero; payback shows after how many years cumulative cash flows cover the investment. A positive NPV means the project returns more than the chosen discount rate.
Taxes and depreciation
Income tax (IRES or IRPEF) is calculated with a single rate on taxable income; depreciation reduces taxable income but is not a cash outflow. IRAP, the cost uplift for hyper-depreciation, deductibility limits and tax credits are optional.
Scenarios
Besides the base case, the tool calculates two alternative scenarios from the changes in revenue and costs that you enter, and compares them in the result and in the report. Year-by-year values can also be edited.
Assumptions and limits
What is already set
Parameters are in the Parameters panel, closed by default: discount rate, tax rate, tax depreciation, disposal value, growth of revenue and costs and the treatment of losses. Year-by-year values are pre-filled and can be reset.
What the calculation does not consider
Cash flows fall at year end, with no inflation or changes in working capital; surtaxes, other incentives and the rules for small businesses are not considered. The final capital gain is taxed in full in the year, except for the sale of a business or business unit held for at least three years (art. 86(4) TUIR).
Losses
The treatment of losses can be set to no tax saving, immediate saving or carry-forward under art. 84 TUIR, with the 80% income limit and no time limit. With the prudent setting, the NPV of projects that start with losses may be understated.
Notice and sources
This is an indicative simulation based on general information. It does not replace an assessment of the specific case: investment decisions must be assessed with the company’s actual data, the text of the rules and company records.
Last legal check: 6 November 2026. Sources: Presidential Decree 917/1986 (TUIR), arts. 11, 77, 84, 86, 101, 102 and 164; Law no. 199 of 30 December 2025, art. 1, paras. 3, 42 and 427-436; Legislative Decree 446/1997, art. 16; Ministerial Decree of 31 December 1988 on depreciation coefficients.