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Net Present Value

Values a project by discounting future cash flows to today.

Interactive inputs coming — use the formula and example below.

Exemple concret

A positive NPV suggests the project adds value.

Comment l'utiliser

  • Use the formula below with your own figures.

La formule

NPV = Σ cash flow ÷ (1+r)ⁿ − investment.

Exemple concret

A positive NPV suggests the project adds value.

Questions fréquentes

What rate to use?

Your cost of capital or required return.

Positive NPV?

Generally worth pursuing.

Conseils

  • Know your break-even before scaling spend.
  • Separate margin from markup when pricing.
  • Discount future cash flows to value projects.

Termes clés

Break-even
Where revenue covers costs.
Margin
Profit as a percent of price.
NPV
Discounted value of future cash flows.