NPV


Also found in: Dictionary, Acronyms, Encyclopedia, Wikipedia.

NPV

Net Present Value

A measure of discounted cash inflow to present cash outflow to determine whether a prospective investment will be profitable. For example, if a dentist wishes to purchase a new dental practice, he may calculate the net present value over a number of years to see if he will recover his investment in a reasonable period of time. If the ask price for the dental practice is $500,000, this is the present cash outflow used in the calculation. If the discounted cash inflow over, say, two years, is greater than or equal to $500,000, then the investment will likely be profitable. See also: Present value.
References in periodicals archive ?
38 percent, then both Project 1 and Project 2 are undertaken according to the NPV criterion.
The $30,132 NPV in cell E26 indicates that this independent project is acceptable--the NPV represents a $30,000 gain (the return from the project is greater than the cost of capital, that is the return available by investing the capital elsewhere).
The second, and more common, argument against the use of NPV analysis under uncertainty concerns the ability of management to respond to uncertainty over time.
Numbers represent average of scores from all sites) Best EMR Outstanding EMR Functionality 8 3 Data Standards 8 8 Interoperability 6 7 Technical Infrastructure 7 7 NPV $1.
The total NPV of the savings over four years looks better with a net return of $60,015.
David left the meeting feeling that one way or another Scott was going to insure the project achieved a positive NPV and met company investment criteria.
Given the other parameters, by determining [alpha] and [beta] the government can change the decision of the firm from initially rejecting the project (when NPV < 0) to accepting it if NP[V.
The contribution to the occupational pension scheme for early retirement is acceptable for the supply chain, if the NPV of contributions to the occupational pension fund [n.
Generally, this is a valid and logical assumption, and corporate investment NPV calculations should not depend on the capital financing structure for a specific investment.
The NPV calculations for extending BVS's servicing capability for electric vehicles to all 440 of its owned and managed workshops show a negative NPV of [euro]796,000 at the end of year three and a positive NPV of [euro]17,000 at the end of year four.
Additionally, NPV has received various steel pipe pile orders for the Australian market.