Net Present Value (NPV)Knowledge Center 
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Traditional valuation method. Explanation of Net Present Value. 
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What is Net Present Value? DefinitionThe Net Present Value (NPV) of an investment (project) is the difference between the sum of the discounted cash flows which are expected from the investment, and the amount which is initially invested. It is a traditional valuation method (often for a project) used in the Discounted Cash Flow measurement methodology, whereby the following steps are undertaken: Steps in the calculation of Net Present Value
The intermediate result is called: Present Value.
The end result is called: Net Present Value. Therefore NPV is an amount that expresses how much value an investment will result in. This is done by measuring all cash flows over time back towards the current point in present time. If the NPV method results in a positive amount, the project should be undertaken. Limitations of Net Present Value
Book: S. David Young, Stephen F. O'Byrne  EVA and ValueBased Management: A Practical Guide..  Book: Aswath Damodaran  Investment Valuation: Tools and Techniques for Determining the ..  Book: James R. Hitchner  Financial Valuation: Applications and Models 
Compare with Net Present Value: Internal Rate of Return  Payback Period  CostBenefit Analysis  Total Cost of Ownership  CAGR  Cost of Equity Return to Management Hub: Decisionmaking & Valuation  Finance & Investing 

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