Definition of Net Present Value Net present value is the combination of 1) the present value of cash inflows, and 2) the present value of the cash outflows. To arrive at these present value amounts, the future cash flows are discounted by a specified interest rate. The specified rate ...
Define net present value. net present value synonyms, net present value pronunciation, net present value translation, English dictionary definition of net present value. n accounting an assessment of the long-term profitability of a project made by addin
DefinitionFormulas and calculationDecision ruleExamplesStrengths and weaknesses of NPV Home Accounting Capital Budgeting Net Present Value Net Present Value (NPV)Net present value (NPV) of a project represents the change in a company's net worth/equity that would result from acceptance of the ...
present valueof cash flows minus initial investment. Related Terms: Net Present Value (NPV) Method A method of ranking investment proposals.npvis equal to thepresent valueof the future returns, discounted at the marginal cost of capital, minus thepresent valueof the cost of the investment. NPV ...
net present value inFinance topic From Longman Business Dictionaryˌnet ˌpresent ˈvaluewritten abbreviationNPV[countable, uncountable]thevalueof theincomefrom a businessinvestmentusing a particularpercentagetocalculateitsDISCOUNTEDCASHFLOW(=the money it will bring in thefuture,reducedat a particularrate...
Define Net present value of future investments. Net present value of future investments synonyms, Net present value of future investments pronunciation, Net present value of future investments translation, English dictionary definition of Net present val
Definition of Present Value (PV) Present value or PV is the result of discounting one or more future amounts to the present. The greater the discount rate, the smaller the present value. Examples of Present Value A cash amount of $10,000 received at the end of 5 years will have a ...
Define and explain the net present value method of evaluating capital investment proposals. How is it calculated? What are advantages and disadvantages of this method? Contents: Definition and explanation Example Choosing from several alternative proposals ...
What Is Net Present Value (NPV)? Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyze a project's projected profitability. ...
value of money by discounting the projected cash flows back to the present, using a company'sweighted average cost of capital(WACC). A project or investment's NPV equals the present value of net cash inflows the project is expected to generate,minus the initial capital requiredfor the project...