The sum of an investment's cash flows expressed in today's money, discounted at the return you require, minus the initial investment. If positive, the investment beats that return.
An example
Investing €12,000 to receive €4,000 a year for 4 years has an NPV of €1,248.51 at 8%.
Learn more
- What happens after you earn the investment back?
- Is money received sooner worth the same as money received later?
- What is a project with two future receipts worth today?
Related terms
IRR (internal rate of return)ROI (return on investment)Payback period