NPV

Definition

Net Present Value — the present value of future cash flows minus initial investment.

Visual Reference

Example

CFOs rely on NPV when structuring capital and planning corporate strategy.

In Practice

Also known as: Net Present Value. Closely related to IRR, DCF.

Word Usage

Capital budgeting; Investment appraisal; Project evaluation

Use Case

Applied in Corporate Finance contexts: Capital budgeting; Investment appraisal