Reviewed by David KindnessFact checked by Vikki VelasquezReviewed by David KindnessFact checked by Vikki Velasquez Net present value (NPV) helps companies determine whether a proposed project will be ...

Net present value (NPV) represents the difference between the present value of cash inflows and outflows over a set time period. Knowing how to calculate net present value can be useful when choosing ...

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

The discount factor of a company is the rate of return that a capital expenditure project must meet to be accepted. It is used to calculate the net present value of future cash flows from a project ...

Investopedia contributors come from a range of backgrounds, and over 25 years there have been thousands of expert writers and editors who have contributed. Amy is an ACA and the CEO and founder of ...

Opinions expressed by Entrepreneur contributors are their own. No two businesses are worth the same amount of money. Whether you’re a lender looking to decide whether a business is a worthwhile ...

Calculate the present value of each year's cash flow by dividing by (1 + discount rate)^number of years. Sum all present values to find the total value of projected cash flows, which in this example ...