Net present value (NPV) helps companies determine whether a proposed project will be financially viable. It encompasses many financial topics in one formula: cash flows, the time value of money ...

For example, if a retail store is thinking of opening a new location, a net present value analysis can shed some light on whether the project is worth undertaking. Net Present Value Formula ...

Present value looks at it in reverse. For example, if you are due to receive $1,000 five years from now—the future value (FV)—what is that worth to you today?

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.

Learn what present value (PV) and future value (FV) are and how to calculate present value in Excel given the future value, interest rate, and period.

Present value describes the annuity in today's dollars. As an example, if a client promised you five annual payments of $10,000 each, the total $50,000 in payments would be worth less in present ...

What's the NPV? NPV stands for net present value, and it is an accounting calculation that every lender makes about each loan that is reviewed for a possible loan modification.

A perpetuity is a security that pays its holder a cash flow indefinitely. As such the approach to valuation for these securities is unique. Learn more about perpetuities.

Therefore, the "present value" to you -- the value in today's dollars -- of that $100 future cost is actually only $95.24.

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.

As mentioned, net present value is not specific to investing in stocks or other securities. Businesses can also use net present value formulas to determine where to allocate their capital.