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What is net present value?
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Answer / sridhar
Net present value (NPV) is a standard method for the
financial appraisal of long-term projects. Used for capital
budgeting, and widely throughout economics, it measures the
excess or shortfall of cash flows, in present value (PV)
terms, once financing charges are met. By definition,
NPV = Present value of net cash flows
Where
t - the time of the cash flow
n - the total time of the project
r - the discount rate
Ct - the net cash flow (the amount of cash) at time t.
C0 - the capital outlay at the beginning of the investment
time ( t = 0 )
| Is This Answer Correct ? | 7 Yes | 0 No |
Answer / mehraj wani
Net Present Value is the Difference between the PV of Cash
inflows and the PV of Cash outflow. The NPV is the
technique that takes into account the Time Value of Money.
NPV is a capital budgeting technique to check the
feasibility / viability of a project. If NPV is equal to
zero or greater than Zero(NPV is Positive)than the project
is considered to be viable otherwise not feasible.
| Is This Answer Correct ? | 4 Yes | 0 No |
Answer / chandrasekhar hota
NPV = Present Value of cash inflows - Present Value of cash
outflows.
| Is This Answer Correct ? | 3 Yes | 0 No |
Answer / mani kandan
the difference between present outflow of cash and expected
future cash inflow
| Is This Answer Correct ? | 2 Yes | 0 No |
Answer / guest
its refers to the difference between present value of cash
inflows and cash outflows.
| Is This Answer Correct ? | 2 Yes | 0 No |
Answer / nitya
In long term planning decision for investment and their
financing,net present value is being calculated..
for this we need to know the future value of cashflows by
summing up the present value of cashflows per year and
deducting the same from the cashoutflows.
| Is This Answer Correct ? | 2 Yes | 0 No |
Answer / alok jalan
NPV is the present value of the future Cash inflows
| Is This Answer Correct ? | 1 Yes | 0 No |
Answer / alok jalan
NPV is an approach used in capital budgeting where the
present value of cash inflows is subtracted by the present
value of cash outflows. NPV is used to analyze the
profitability of an investment or project.
NPV analysis is sensitive to the reliability of future cash
inflows that an investment or project will yield
| Is This Answer Correct ? | 2 Yes | 1 No |
Answer / abhishek
Difference between the intial investment and the present
value of the future cash inflows.
| Is This Answer Correct ? | 1 Yes | 0 No |
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