NPV

Definition

Net Present Value. The present value of an investment's future net cash flows minus the initial investment. If positive, the investment should be made (unless an even better investment exists), otherwise it should not.

Use NPV in a sentence

The NPV of the investment was the only metric we were considering as we wanted to simplify the decision making process.

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They had to determine what the NPV of their lottery payments would be. Depending on the future interest rate it may make more sense to take a lump sum.

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When my boss wanted to know how much our investment was worth today even taking into account our future cash flows, he told me he wanted to know the NPV on the investment.

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