Net Present Value (NPV) is a financial metric used to evaluate an investment's profitability. A NVP is the difference between the present value of all cash inflows from the investment or the project and the present value of all cash outflows required to obtain the investment or to finance the project at a given discount rate. If the NPV is positive, it indicates that the investment is expected to generate more cash inflows than outflows and is therefore considered profitable. The formula for NPV = (Cash inflows from investment) – (Cash outflows or costs of investment)
Related Definitions in the Project: The Economic Reviews
