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What (who) is net present value - definition
Net present value
VALUATION IN FINANCE
Discounted present value; Net Present Value; Net present worth; Discounted price
The net present value (NPV) or net present worth (NPW) applies to a series of cash flows occurring at different times. The present value of a cash flow depends on the interval of time between now and the cash flow.
Present value
ECONOMIC CONCEPT DENOTING VALUE OF AN EXPECTED INCOME STREAM DETERMINED AS OF THE DATE OF VALUATION
Present discounted value; Hypothetical future value; Present Value; Present value of costs; Present worth; Years' purchase
In economics and finance, present value (PV), also known as present discounted value, is the value of an expected income stream determined as of the date of valuation. The present value is usually less than the future value because money has interest-earning potential, a characteristic referred to as the time value of money, except during times of zero- or negative interest rates, when the present value will be equal or more than the future value.
Present worth
ECONOMIC CONCEPT DENOTING VALUE OF AN EXPECTED INCOME STREAM DETERMINED AS OF THE DATE OF VALUATION
Present discounted value; Hypothetical future value; Present Value; Present value of costs; Present worth; Years' purchase
·add. ·- The principal which, drawing interest at a given rate, will amount to the given sum at the date on which this is to be paid; thus, interest being at 6%, the present value of $106 due one year hence is $100.
Examples of use of net present value
1. After restructuring, the net present value of Argentine debt is lower than that of Brazil or Uruguay.
2. The companies would be required by March 31 to cut costs, restructure debt and obtain concessions from labor sufficient to report a positive net present value.
3. At about 34 cents on the dollar in net–present–value terms, the offer represents the biggest debt reduction achieved by any comparable country.
4. In addition, the March 31 deadline will require the companies to tally all current and expected future costs, weigh them against assets, and show a "positive net present value" –– in other words that they are worth something.
5. By comparison, the "net present value per acre of forest" runs at most $500, said Larry Swanson, director of the O‘Connor Center for the Rocky Mountain West at the University of Montana.