NPV
Finance
NPV (Net Present Value)
Net Present Value
Present value of future cash inflows minus present value of outflows using a required discount rate.
Examples
- 01A new warehouse management system costs EUR 350,000 and has an NPV of EUR 420,000 at a discount rate of 8 % over 7 years.
- 02The investment committee reviews the NPV of each project and asks how it changes if savings start six months later than planned.
- 03When the expected volume is cut by 20 %, the NPV of the second packaging line turns negative and the project is postponed.