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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.

Q. 162

Explain the usage of Net Present Value in decision making by providing relevant examples.You may use the calculator at the following link -https://www.benchmarksixsigma.com/calculators/net-present-value/

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