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NPV |
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Definition of NPVNPVSee net present value. NPVSee: Net present value.
Related Terms:NPV (net present value of cash flows)Same as PV, but usually includes a subtraction for an initial cash outlay. Net present value (NPV)The present value of the expected future cash flows minus the cost. NPV profileA graph of npv as a function of the discount rate. Present value of growth opportunities (NPV)Net present value of investments the firm is expected to make Net present value (NPV)A discounted cash flow technique used for investment appraisal that calculates the present value of future cash flows and deducts the initial capital investment. net present value (NPV)Equals the present value (PV) of a capital investment Net Present Value (NPV)The present value of all future cash inflows minus the present value net present value (NPV)the difference between the present values of all cash inflows and outflows for an investment project net present value (NPV)Present value of cash flows minus initial investment. Net Present Value (NPV) MethodA method of ranking investment proposals. npv is equal to the present value of the future returns, discounted at the marginal cost of capital, minus the present value of the cost of the investment. Discretionary cash flowCash flow that is available after the funding of all positive npv capital investment Internal rate of returnDollar-weighted rate of return. Discount rate at which net present value (npv) Net present value of future investmentsThe present value of the total sum of npvs expected to result from Net present value ruleAn investment is worth making if it has a positive npv. Projects with negative npvs Separation theoremThe value of an investment to an individual is not dependent on consumption discounted cash flow (DCF)Refers to a capital investment analysis technique reinvestment assumptionan assumption made about the rates of return that will be earned by intermediate cash flows from a capital project; npv and PI assume reinvestment at the discount rate; IRR assumes reinvestment at the IRR internal rate of return (IRR)Discount rate at which project npv = 0.
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