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Definition of NPV
See net present value.
See: Net present value.
Same as PV, but usually includes a subtraction for an initial cash outlay.
The present value of the expected future cash flows minus the cost.
A graph of npv as a function of the discount rate.
Net present value of investments the firm is expected to make
A discounted cash flow technique used for investment appraisal that calculates the present value of future cash flows and deducts the initial capital investment.
Equals the present value (PV) of a capital investment
The present value of all future cash inflows minus the present value
the difference between the present values of all cash inflows and outflows for an investment project
Present value of cash flows minus initial investment.
A 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.
Cash flow that is available after the funding of all positive npv capital investment
Dollar-weighted rate of return. Discount rate at which net present value (npv)
The present value of the total sum of npvs expected to result from
An investment is worth making if it has a positive npv. Projects with negative npvs
The value of an investment to an individual is not dependent on consumption
discounted cash flow (DCF)
Refers to a capital investment analysis technique
an 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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