JoVE Logo

Iniciar sesión

Net Present Value (NPV) is a fundamental capital budgeting tool used to evaluate the profitability of a project or investment. It calculates the difference between the present value of future cash inflows and outflows, accounting for the time value of money. The purpose of NPV is to determine whether the projected earnings from an investment exceed its costs when discounted to their current value.

Estimating the timing and amount of future cash flows and applying a discount rate while calculating NPV is essential, as it typically reflects the minimum acceptable rate of return or the company's cost of capital. The discount rate can also represent the returns available from alternative investments with comparable risk.

If the NPV is positive, the project's rate of return is greater than the discount rate, indicating a profitable investment. Conversely, a negative NPV suggests that the investment would underperform compared to alternative options.

NPV is valuable because it quantifies both profitability and risk in present-day terms, allowing decision-makers to compare different investment opportunities. By integrating these future cash flows into a single value, NPV helps businesses make more informed financial decisions, ensuring the most efficient use of capital.

Tags

Net Present ValueNPVCapital BudgetingProfitability EvaluationCash InflowsCash OutflowsTime Value Of MoneyDiscount RateRate Of ReturnFinancial DecisionsInvestment OpportunitiesRisk Assessment

Del capítulo 7:

article

Now Playing

7.9 : Net Present Value

Capital Budgeting

291 Vistas

article

7.1 : Introduction to Capital Budgeting

Capital Budgeting

266 Vistas

article

7.2 : Basics of Investment Decision-making

Capital Budgeting

146 Vistas

article

7.3 : Importance of Capital Budgeting

Capital Budgeting

105 Vistas

article

7.4 : Advantages and Limitations of Capital Budgeting

Capital Budgeting

329 Vistas

article

7.5 : Capital Budgeting Techniques

Capital Budgeting

157 Vistas

article

7.6 : Payback

Capital Budgeting

89 Vistas

article

7.7 : Payback Period

Capital Budgeting

64 Vistas

article

7.8 : Discounted Payback Period

Capital Budgeting

77 Vistas

article

7.10 : Net Present Value Method

Capital Budgeting

173 Vistas

article

7.11 : Decision-making Through Net Present Value

Capital Budgeting

67 Vistas

article

7.12 : Internal Rate of Return

Capital Budgeting

182 Vistas

article

7.13 : Calculating Internal Rate of Return

Capital Budgeting

45 Vistas

article

7.14 : Decision-making Through Internal Rate of Return

Capital Budgeting

50 Vistas

article

7.15 : Average Rate of Return

Capital Budgeting

57 Vistas

See More

JoVE Logo

Privacidad

Condiciones de uso

Políticas

Investigación

Educación

ACERCA DE JoVE

Copyright © 2025 MyJoVE Corporation. Todos los derechos reservados