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.
 | | 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 to analyze the profitability of a projected investment or project. | | Breaking it Down: | | Determining the value of a project is challenging because there are different ways to measure the value of... | | Read More » | | Related to "Net Present Value - NPV" | | | | Modified Internal Rate Of Return - MIRR | | While the internal rate of return (IRR) assumes the cash flows from a project are reinvested at the IRR, the modified IRR assumes that positive cash flows are reinvested at the firm's cost of capital, and the initial outlays are financed at the firm's financing cost. | | Read More » | | | Sensitivity Analysis | | Sensitivity analysis is a technique used to determine how different values of an independent variable will affect a particular dependent variable under a given set of assumptions. | | Read More » | | | Discounting | | Discounting is the process of determining the present value of a payment or a stream of payments that is to be received in the future. | | Read More » | | | Salvage Value | | Salvage value is the estimated value that an owner is paid when an item is sold at the end of its useful life and is used to determine annual depreciation | | Read More » | | |  | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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