NPV Meaning to an Investor
Management Fan, Member
Basically it means the project is worth-pursuing. Because the hurdle rate or cost of capital have already been calculated for the expected cash flows of the project in the future period are dragged to the present period. This gives you the value of the project now.
In addition, because above rate is used, this implies that you will gain in the project for its future cash flows against foregoing if you are going to invest your capital elsewhere (eg. bank, mutual fund, stock market.
To the investor, this is value creation.