Net Present Value (NPV)

The value, in the present, of an investment or financial transaction that will pay-off in the future, minus the cost of the investment up until the time of that pay-off. NPV represents the profit or loss, in present worth, of future transactions so they are comparable against other investments. NPV is usually calculated by adding the present value of future cash flows, residual values, and interest, minus investment costs, opportunity costs, and future... Read More