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NPV formula

NPV formula

Each cash inflow/outflow is discounted back to its present value (PV). Then they are summed. Therefore, NPV is the sum of all terms.

Source

    Boundless vets and curates high-quality, openly licensed content from around the Internet. This particular resource used the following sources:

    "Net present value."
    http://en.wikipedia.org/wiki/Net_present_value Wikipedia GNU FDL.

Related Terms

  • time value of money
  • discounted cash flow
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