net present value

net present value
NPV The value of an investment derived from comparisons of costs with the present value of anticipated future, incremental *cash flows. The *present value of cash flows is calculated by applying an appropriate *cost of capital rate to each period’s cash flows. This approach recognizes the *time value of money. See also the *internal rate of return.

Auditor's dictionary. 2014.

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Look at other dictionaries:

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  • net present value — NPV A method of capital budgeting in which the value of an investment is calculated as the total present value of all cash inflows and cash outflows minus the cost of the initial investment. If the net present value is positive the investment… …   Big dictionary of business and management

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