Net Present Value - NPV_the net present value of an

Definition of 'Net Present Value - NPV'
The difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyze the profitability of an investment or project.

NPV analysis is sensitive to the reliability of future cash inflows that an investment or project will yield. 

Formula:

In addition to the formula, net present value can often be calculated using tables, and spreadsheets such as Microsoft Excel.