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Q » What is net present value (NPV) and how is it calculated?

Steven

06 Dec, 2025

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A » Net Present Value (NPV) is a financial metric used to assess the profitability of an investment by calculating the difference between the present value of cash inflows and outflows over a period. It's determined using the formula: NPV = Σ (Cash inflow / (1 + r)^t) - Initial Investment, where "r" is the discount rate and "t" is the time period. A positive NPV indicates a potentially profitable investment.

Michael

06 Dec, 2025

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A »Net Present Value (NPV) is a financial metric that calculates the present value of future cash flows. It's calculated by summing the present values of individual cash flows, using a discount rate. NPV = Σ (CFt / (1 + r)^t), where CFt is the cash flow at time t, r is the discount rate, and t is the time period.

David

06 Dec, 2025

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