NPV - Net Present Value

• The present value of an investment's future net cash flows minus the initial investment. If positive,

the investment should be made (unless an even better investment exists), otherwise it should not.

• NPV profile - An abbreviation for net present value profile. An NPV profile charts the net present value

of a business activity as a function of the cost of capital. This comparison allows decision-makers to

determine the profitability of a project or initiative in different potential financing scenarios, enabling

more effective cost-benefit planning.

• NPV compares the value of a złoty today to the value of that same złoty in the future, taking inflation

and returns into account.

• If the NPV of a prospective project is positive, it should be accepted.

• However, if NPV is negative, the project should probably be rejected because cash flows will also

be negative.