Definition: The net present value (NPV) of an investment is the present (discounted) value of future cash inflows minus the present value of the investment and any associated future cash outflows.

Businesses must observe proper procedures when undertaking long-term investments to ensure the projected payoff is worth the resource allocation. Capital investments are costly and their benefits are ...

The net present value calculation is a popular method used by business managers to evaluate the profitability of different projects. It is easy to use but it also has certain limitations. Advantages ...

David Kindness is a Certified Public Accountant (CPA) and an expert in the fields of financial accounting, corporate and individual tax planning and preparation, and investing and retirement planning.

Net present value (NPV) represents the difference between the present value of cash inflows and outflows over a set time period. Knowing how to calculate net present value can be useful when choosing ...