NPV


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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 ?
While capex may indeed increase earnings potential of a company, it is the return on capital investment that we should look out for because only positive NPV capex can sustain a long-term share price appreciation.
NPV has the typical conserved genome termini shared among phleboviruses (5'-ACACAAAG and CUUUGUGU-3') (8).
In this example, we assume a discount rate of 11% for the NPV calculation for both pieces of equipment.
NPV is the dynamic index to evaluate the profit ability of CSP project during the calculation period.
Two examples of industrial wood flooring manufacturers utilizing 4/4 red oak were modeled to determine the impact of vacuum drying versus conventional drying on capital budget techniques (cash flow, NPV, and cost--benefit analysis).
Second, composite sensitivities, specificities, PPV, and NPV were examined over time by use of serial testing.
NPV = Initial CapEx + Year 1 OpEx + [summation] net annual cash flow / [(1 + discount rate).sup.year of cash flow]
On the other hand, Education and Architecture have the lowest IRR and NPV. In addition, the results suggest that students tend to choose a university major based on the NPV and not on the IRR.
This article demonstrates how to calculate Pd, P, PPV, and NPV using a notional air cargo screening system as an example.
The most commonly used discounted cash flow methods are net present value (NPV) and internal rate of return (IRR), which were used as output variables in this analysis.
Previous studies tended to use the net present value (NPV) approach.