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What do the letters NPV stands for, how to calculate it and what does it represent?

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Question ajoutée par Jan De Baere , Interim Manager different companies , Link-It All
Date de publication: 2015/03/01
Elias Amin Badra
par Elias Amin Badra , Managing Partner , HELLENIX - INDUSTRIAL RELATIONS ADVISORS, Greece

Net Present Value, it is the method to compare the value of money today in relation to its value in the future.

If your ROI (Return On Investment) projects a figure above the future value of the potentially diminished value of today, then you would proceed with the investment, but if your returns (even with positive projection) are below the diminished value then it would not be advisable to invest or to deposit.

umar atta ullah
par umar atta ullah , HR COORDINATOR , AL MULLA GROUP

net Present Value

Net Present Value (NPV)where:

Ct = net cash inflow during the period

Co= initial investment

r = discount rate, and

 

t = number of time periods 

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