Net present value method
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Net present value method (alternatively known as NPV method) is a method that is used to assess the present value of the project's expected future cash flows, discounted at the appropriate cost of capital. NPV is a direct measure of the value of the project to shareholders.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Net present value method (NPV method). Used to assess the present value of the project's expected future cash flows, discounted at the appropriate cost of capital. NPV is a direct measure of the value of the project to shareholders.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
