(NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time.
NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project.
<h3>Is a high or low NPV better?</h3>
When comparing similar investments, a higher NPV is better than a lower one.
When comparing investments of different amounts or over different periods, the size of the NPV is less important since NPV is expressed as a dollar amount and the more you invest or the longer, the higher the NPV is likely to be.
<h3>What is NPV example?</h3>
The net present value is the difference between the present value of future cash inflow and the present value of cash outflow over a period of time.
NPV is widely used in capital budgeting. It is essential because capital expenditure requires a considerable amount of funds.
Learn more about NPV here:
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