The Net Present Value (NPV) Equals the difference between the present value of an investments cash
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The Net Present Value (NPV)
• Equals the difference between the present value of an investment’s cash inflows and the present value of its outflows.
• Is a valid figure of investment merit.
• When positive, indicates the investment should be undertaken.
• Is an estimate of the expected increase or decrease in wealth accruing to the investor.
• Provides a practical decision rule for managers seeking to create shareholder value.
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Related Book For
Analysis For Financial Management
ISBN: 9781260772364
13th Edition
Authors: Robert Higgins, Jennifer Koski, Todd Mitton
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