Allday, NPV = Net Present ValueIt is a way to intepret a...

  1. JPC
    56 Posts.
    Allday,

    NPV = Net Present Value

    It is a way to intepret a companies worth taking into account when costs / revenue are made. That is, money made in the future is worth slightly less than money made today (due to inflation). So NPV is about bringing all costs and revenues back to an equivalent value for today based on when they will occur in the future. That is why the number used for the discount rate is also important as it is an unknown assumed value considering it occurs in the future.

 
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