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 ...

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 ...

Now I (sort of) understand why so many homeowners are in loan modification hell. This Dante's Housing Crisis Inferno has been fanned by the introduction of a simple calculation: the NPV. What's the ...

An even cash flow of regularly scheduled payments defines an annuity. If you borrow money to start your business, the monthly payments are calculated using an annuity formula. Two basic annuity ...

Calculate the present value of each year's cash flow by dividing by (1 + discount rate)^number of years. Sum all present values to find the total value of projected cash flows, which in this example ...

Rajeev Dhir is a writer with 10+ years of experience as a journalist with a background in broadcast, print, and digital newsrooms. Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society ...

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Dr. Melody Bell is a personal finance expert, entrepreneur, educator, and researcher. Melody ...

In part one of this two-part series I focused primarily on calculating the intrinsic value of a common stock based on an analysis and review of historical information and data. Although I strongly ...

When a company is making capital budgeting decisions -- whether it's something as small as buying a new copier vs. servicing an old one or as big as entering a new market -- it must weigh the expected ...

A perpetuity in finance is a stream of payments or cash flows that is presumed to extend indefinitely into the future. Learn the importance of perpetuities, with the help of examples of investments. A ...

1. Discount rate (in percent) - This field is the unified discount rate. The unified discount rate methodology is not currency-specific, i.e. the unified discount rate is used for all concessionality ...