Net present value (NPV)

The present value of an investment by discounting the series of payments to the present time. It is the sum of the net surpluses of an investment discounted at an interest rate, namely the cash inflows minus the cash outflows during the period of use minus the acquisition costs (the present value of a series of future net cash flows that will result from a long term project, minus the amount of the original investment). If the net present value from an investment is positive, there is an increase in wealth; if it is negative, the investor loses. – See net present value.

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