net present value rule

Definition

Financing principle that in investment proposals where costs occur immediately but returns are received over several future periods, only the proposals with positive net present value should be considered. In situations where costs and returns are practically simultaneous, the 'marginal cost equals marginal revenue' rule is applied.
Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
net present value of growth opportunities (NPVGO) net price