The net present value is a mathematical formula that is being used by businesses for capital budgeting. In fact, it is considered as the most effective method to analyzing the profitability of a project or investment.
The net present value analysis is highly sensitive to future cash inflows that a project or investment will yield. In addition, this formula can be calculated using spreadsheets and tables.
The Net Present Value (NPV) compares the value of your money today to the value of the same amount of money in the future, taking the returns and inflation into account. Continue reading