Net present value
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Net present value (also known by its acronym, NPV) is a method of ranking investment proposals using the NPV, which is equal to the present value of the project's free cash flows discounted at the cost of capital.
Definitions
According to Fundamentals of Financial Management by Eugene F. Brigham and Joel F. Houston (15th edition),
- Net present value (NPV). A method of ranking investment proposals using the NPV, which is equal to the present value of the project's free cash flows discounted at the cost of capital.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
