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 ...

Advantages & Disadvantages of Net Present Value in Project Selection. Net present value, or NPV, is one of the calculations business managers use to evaluate capital projects. A capital project is ...

Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money.

Net present value of growth opportunities is a calculation of the net present value of all future cash flows involved with a potential acquisition.

How net present value works The basic tenet of the net present value method is that a dollar in the future is not worth as much as one dollar today.