Net Present Value (NPV)
Net Present Value (NPV) is the current or the present value of the future cash flows (both inflow and outflow). The current value of a future cash flow depends on the time gap between today and the time of cash flow and discount rate. For e.g. if we anticipate a cash inflow of Rs. 100 after 2 years. NPV will determine the cash-flow as on today (amount you will receive if you do not want to wait for 2 years at a particular discount rate). A profitable project is one where the NPV is positive.
An application-oriented question on the topic along with responses can be seen below. The best answer was provided by
Mohit Rawat on 28th May 2019.
Applause for all the respondents- Mohit Rawat, Satishkumar Jain, Dr. Gautam Nichenametla, Sreyash Sangam.
Also review the answer provided by Mr Venugopal R, Benchmark Six Sigma's in-house expert.