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What Is Net Present Value?
Formula
NPV calculates the difference between the present value of cash inflows and outflows over a period of time.
A positive NPV means the investment is expected to generate value above the required return.
Common use cases:
- Evaluating capital projects
- Comparing investment alternatives
- Business investment decisions
Frequently Asked Questions
Emily Taylor
Certified Public Accountant, CPA, MBA
Emily is a Certified Public Accountant with an MBA in Finance. She has over 10 years of experience in tax planning, business accounting, and personal finance advisory. She develops practical financial tools for everyday money management.
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