Net present value (NPV) represents the difference between the present value of cash inflows and outflows over a set time period. Knowing how to calculate net present value can be useful when choosing ...

Chris Gallant, CFA, is a senior manager of interest rate risk for ATB Financial with 10 years of experience in the financial markets. Suzanne is a content marketer, writer, and fact-checker. She holds ...

Small business owners frequently make decisions about how to invest money to increase profitability. Part of being a good business manager is the ability to analyze the income potential of long-term ...

Businesses must observe proper procedures when undertaking long-term investments to ensure the projected payoff is worth the resource allocation. Capital investments are costly and their benefits are ...

Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money for the best return. Net present value tells us ...

Q. I’m trying to decide whether or not to invest a large amount of money in new technology that will lower our production costs. A newly-minted MBA I just hired has completed something he calls a Net ...

Credit: By discounting every future $3,000 cash flow back at a rate of 10%, and subtracting the initial cash outlay of $15,000, we arrive at a net present value of $3,433.70 for this project. Under ...

Present value is a useful mathematical formula designed to figure out if money received now is worth more than money received later. What Is Present Value? Terms Associated With the Present Value of ...