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What is Net Present Value (NPV)

Chapter 72
Encyclopedia of Business Analytics and Optimization
The sum of present values of the cash flows, discounted at a fixed rate, of a financial project.
Published in Chapter:
Economic Value Added
Paola Modesti (University of Parma, Italy)
Copyright: © 2014 |Pages: 6
DOI: 10.4018/978-1-4666-5202-6.ch072
Full Text Chapter Download: US $37.50 Add to Cart
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Chapter 86
Real Options Reasoning as a Tool for Managerial Decision Making
The discounted cash flow method discounts future cash flows to obtain the net present value of a project. The net present value can be calculated as follows:, where i= 1,….N is an index of the N stages in the project, t is the time at which all future cash flows become zero, CFit is the cash flow at time t given that stage i is at the end of the stage and r is the discount rate for cash flows. If the NPV > 0, then the project should be undertaken, otherwise the project should be abandoned.
Published in Chapter: Real Options Reasoning as a Tool for Managerial Decision Making; From: Encyclopedia of Decision Making and Decision Support Technologies
Full Text Chapter Download: US $37.50 Add to Cart
Chapter 511
Real Options Analysis in Strategic Information Technology Adoption
The present value of an investment’s future net cash flows minus the initial investment.
Published in Chapter: Real Options Analysis in Strategic Information Technology Adoption; From: Encyclopedia of Information Science and Technology, Second Edition
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Chapter 9
The Value of Flexibility
Is the present value of an investment in the future, usually calculated by the difference between the present monetary values of the costs and the benefits of the investment.
Published in Chapter: The Value of Flexibility; From: Handbook of Research on Contemporary Theoretical Models in Information Systems
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Chapter 105
An Economic Model for Evaluating Costs and Benefits for Distance Education Programs
The present value of an investment’s future net cash flows minus the initial investment.
Published in Chapter: An Economic Model for Evaluating Costs and Benefits for Distance Education Programs; From: Encyclopedia of Distance Learning, Second Edition
Full Text Chapter Download: US $37.50 Add to Cart
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