Small business owners frequently make decisions about how to invest money to increase profitability. Part of being a good business manager is the ability to analyze the income potential of long-term ...

Credit: By discounting every future $3,000 cash flow back at a rate of 10%, and subtracting the initial cash outlay of $15,000, we arrive at a net present value of $3,433.70 for this project. Under ...

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 ...

Rey Adams is an economist and writer. He has 15+ years of professional experience in investment management and consulting. David Kindness is a Certified Public Accountant (CPA) and an expert in the ...

Definition: The net present value (NPV) of an investment is the present (discounted) value of future cash inflows minus the present value of the investment and any associated future cash outflows.

NPV calculates profitability by considering all cash flows and the time value of money. A positive NPV indicates a potentially profitable investment opportunity. NPV's effectiveness relies on accurate ...

The net present value (NPV) method can be a very good way to analyze the profitability of an investment in a company, or a new project within a company. But like many methods in finance, it is not the ...

Opinions expressed by Entrepreneur contributors are their own. We recently helped a client think through whether or not to invest in new technology to reduce the cost of doing business. Specifically, ...

Capital budgeting decisions are among the most important decisions a business owner or manager will ever make. Which assets to invest in, which products to develop, which markets to enter, whether to ...

a. Net Present Value Example: Suppose we are considering investing in an asset that yields $1000 in year one, $1100 in year two, $1500 in year three and $3200 in year four. If your required rate of ...

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and ...