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Topic: Net present value


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In the News (Tue 16 Jul 19)

  
  Net Present Value   (Site not responding. Last check: 2007-10-10)
Net Present Value criterion is an important assessment which calculates the current value of a future cash flow.
NPV is a very useful tool for corporations and governments alike in that it allows for a comparison of current costs to undertake a project versus the potentials benefits, in this case revenues, that the project will yield sometime in the future.
Therefore the NPV of project XYZ is currently -64,128.20 or to state it another way, the current value of the cash flows generated by this project in the future is -$64,128.20.
www.macroanalytics.com /html/net_present_value.html   (305 words)

  
 ROI Guide: Net Present Value   (Site not responding. Last check: 2007-10-10)
Thus, in the earlier example, the present value of $1.10 a year from now is $1.10 x.909, or $1.00.
Its present value is higher because the returns occur earlier in the project's life.
But when the time value of money is considered, the server consolidation project looks slightly better, with an NPV higher by $9,000, because the returns occur earlier in the project's life.
www.computerworld.com /printthis/2003/0,4814,78530,00.html   (791 words)

  
 Module 3: Net Present Value (NPV)
NPV is equal to the present value of its annual after tax net cash flows less the investment’s initial outlay.
To determine the system's net present value, the 3 year $15,000 cash flow annuity is first discounted back to the present at 10 percent.
Thus, the present value of this $15,000 annuity is $37,305 ($15,000x2.487).
cai.au.edu /webcourses/config/chapter9/bf3701_ch9_m3.html   (193 words)

  
 Net present value - Wikipedia, the free encyclopedia
Net present value (NPV) is a standard method for financial evaluation of long-term projects.
Used for capital budgeting, and widely throughout economics, it measures the excess or shortfall of cash flows, in present value (PV) terms, once financing charges are met.
The sum of all these present values is the net present value, which equals $8,882.
en.wikipedia.org /wiki/Net_present_value   (676 words)

  
 CCH Business Owner's Toolkit | Net Present Value of Major Purchases
The net present value method (NPV) of evaluating a major project allows you to consider the time value of money.
However, using NPV analysis you can determine that if the discount rate on the project was 10 percent, the net present value of the expected returns would be $7,581.60.
NPV analysis is generally used to evaluate the project's cash flows, rather than the income from the project that would be shown on an income statement.
www.toolkit.cch.com /text/P06_6530.asp   (607 words)

  
 Use of Net Present Value Analysis in The Economic Justification Of Laboratory Projects and Investment Decisions   (Site not responding. Last check: 2007-10-10)
NPV analysis yields a result, expressed in after-tax dollars (important for profit-based operations), that takes into consideration the difference in the value of future cash flows and the cost of raising the capital required for the investment.
A positive NPV of $1.00 for a project initiated in 1999 with a hurdle rate of 10% means that the project will return the full cost of the invested capital (10%) plus $1.00 in 1999-equivalent value dollars.
A positive NPV of $1,297,466 indicates that the core lab project would outperform the security by $1,297,466 after compensating for the negative impact of inflation and recovery of the $1.4 million initial investment.
www.beckman.com /LARs/processimprove/netpresent.asp   (1361 words)

  
 Net Present Value   (Site not responding. Last check: 2007-10-10)
The Net Present Value (NPV) of a Capital Budgeting project indicates the expected impact of the project on the value of the firm.
Projects with a positive NPV are expected to increase the value of the firm.
The NPV is calculated as the present value of the project's cash inflows minus the present value of the project's cash outflows.
nalu.hpu.edu /mlane/BusinessFinanceOnline/CB/NetPresentValue.html   (191 words)

  
 Defense Procurement and Acquisition Policy - Contract Pricing Reference Guide
The difference between the present value of the receipts and the present value of the expenditures is net present value.
For example: Determine the present value of a series of 36 monthly payments of $1,000 each due at the beginning of each month for the next three years; that is, $12,000 per year for three years.
Net present value analysis should be used in any analysis supporting Government decisions to initiate, renew, or expand programs or projects which would result in a series of measurable benefits or costs extending for three or more years into the future.
www.acq.osd.mil /dpap/contractpricing/vol2chap9.htm   (4245 words)

  
 Net present value
The equation for present value is Revenue or Cost/(1+interest rate) to the power of years.
Value is defined as increased earnings (or decreased cost) net of expenses incurred to implement the project - including the interest to finance the project's acquisition and the tax break that writing off the project affords.
Net present value, return on capital and rate of return are all methods used to justify projects or purchases.
www.woodweb.com /knowledge_base/Net_present_value.html   (1751 words)

  
 N Definitions: Campbell R. Harvey's Hypertextual Finance Glossary
The current book value of an asset or liability; that is, its original book value net of any accounting adjustments such as depreciation.
The present value of the total sum of NPVs expected to result from all of the firm's future investments.
A model valuing a firm in which net present value of new investment opportunities is explicitly examined.
www.duke.edu /~charvey/Classes/wpg/bfglosn.htm   (5888 words)

  
 Net present value
To determine the value of a sequence of pending payments you need to indicate a comparison net yield, which could be obtained alternatively with the capital.
Summary: to obtain the NPV you simply build the sum of all payments whereby the worth of payments, with a maturity in the future, is reduced as a function of the time and the comparison yield.
With a comparison yield from 0% the net present value is equal to the sum of all still pending payments.
www.irrq.com /us/irr_npv.php   (384 words)

  
 FinAid | Loans | Net Present Value
Net Present Value (NPV) is a way of comparing the value of money now with the value of money in the future.
The NPV of a loan under standard amortization equals the original loan balance when the discount rate is set to the APR of the loan interest rate.
But since the relative order of the NPV values for different loans depends on the discount rate (i.e., whether it is higher or lower than the APR of the interest rate under standard amortization), care should be exercised in the choice of a discount rate.
www.finaid.org /loans/npv.phtml   (970 words)

  
 Arkansas SBDC: BizFacts #1518 - THREE QUESTIONS THAT NET PRESENT VALUE ANALYSIS CAN HELP YOU ANSWER
All of the $2,959 decrease in the applique's value is caused by an increase in the required rate of return from 15 percent to 20 percent.
Although the NPV of the applique is different with each required rate of return, the NPV is always far greater than zero between rates of 10 percent and 20 percent.
Net present value is responsive to the cost of money and the timing of cash flows regardless of the type of investment decision for which it will be used.
asbdc.ualr.edu /bizfacts/1518.asp   (5722 words)

  
 Stochastic Lab - SLInvest is used to evaluate the financial profitability and efficiency of investment projects
You can specify the number of investment periods (the maximum number of periods is 50), you can analyze several investment projects simultaneously (the maximum number of projects is 10) and at the same time you can study the total financial indicators for all projects of the company.
NPV is the discounted cost of the project at the beginning of the project, while NFV is its cost at the end of the period (the cost is estimated with the specified discount rate taken into account).
NPV, NFV, IRR displayed in the "Results" group are calculated each time you change investment sums in project or the discount rate.
www.stochastic-lab.com /slinvest.html   (704 words)

  
 Business School Basics: Evaluating Technology Purchases Using Net Present Value Customer Inter@ction Solutions - Find ...
NPV takes into account the time value of money and is the model your CFO uses to evaluate if an investment is worthwhile enough to warrant the use of the company's money.
NPV is often used to compare two ways of paying for a solution such as a purchase or a lease.
While at three years the NPV of the lease is better ($43,275 for lease versus $12,205 for purchase), the NPV of the purchase becomes a better choice in the fourth and subsequent years ($56,935 for lease versus $60,015 for purchase).
www.findarticles.com /p/articles/mi_qa3995/is_200409/ai_n9453442   (882 words)

  
 net present value - Search Results - MSN Encarta   (Site not responding. Last check: 2007-10-10)
- value of investment project: the value of an investment project found by adding the present value of expected future cash flows and the cost of the initial investment
Present (time) : quotations: Present, The: The use of history is to give value to the…
The use of history is to give value to the present hour and its duty.
encarta.msn.com /net+present+value.html   (214 words)

  
 Principals of Corporate Finance 6th Edition - Brealey and Myers   (Site not responding. Last check: 2007-10-10)
The total present value of the current and future cash flows (point D in the future) is found by adding this year's flow:
Net present value is the addition to your resources from investing in real assets.
This is the difference between the discounted, or present, value of the future income and the amount of the initial investment.
www.mhhe.com /business/finance/bm/npv.mhtml   (1702 words)

  
 Definition of NPV - Net Present Value -Tyner Blain   (Site not responding. Last check: 2007-10-10)
Net present value, or NPV is the great equalizer of financial analysis.
The NPV, or net present value of the $10,000 bond is $9,524.
The net present value of multiple payments is the sum of the net present value of each of the payments.
tynerblain.com /blog/2006/03/05/definition-of-npv-net-present-value   (1326 words)

  
 Net Present Value defined
Net Present Value: The sum that results when the discounted value of the expected costs of an investment are deducted from the discounted value of the expected returns.
The present value takes into account the time value of money; this adjusts to expenditures and returns, as they occur over time, so they can be evaluated equally.
NPV is different from ROI, which is a ratio of net benefits to the costs, because NPV savings uses discounted cash flow to quantify, in today's dollar terms, the projected net gain from the project in net dollar terms.
searchcio.techtarget.com /tip/1,289483,sid19_gci1103812,00.html?track=NL-275&ad=520370   (940 words)

  
 Calculating Net Present Value and IRR Using Excel
Suppose you want to calculate the net present value for the following problem: You are considering an investment in a machine that costs $100,000 and the additional cash inflows (net income + depreciation) from the machine will be $40,000, $ 50,000, and $60,000 over the next three years.
To get the net present value, you have to subtract the 100,000 (remember that adding a negative number is the same as subtracting) from the 110,080.36 and your answer is: 10,080.36.
If the net present value is positive, the PI is greater than 1.
academic.brooklyn.cuny.edu /economic/friedman/npvirr.htm   (351 words)

  
 Net Present Value Analysis: A Primer for Finance Officers. | Finance and Insurance from AllBusiness.com   (Site not responding. Last check: 2007-10-10)
Net present value analysis closely matches the criteria that governments implicitly use when making long-term decisions--meaning that it gives a lower value to dollars in the future.
After converting each year's future value to a present value, the net benefits for each year are summed to calculate the total net benefit.
To convert future dollars to present dollars, net present value analysis uses a number called a "discount rate." A discount rate reflects a government's cost of borrowing or a community's preference for present versus future consumption.
www.allbusiness.com /finance-insurance/773041-1.html   (752 words)

  
 NET PRESENT VALUE SIRE SUMMARIES
The net present value of returns from later descendants is smaller than from first generation descendants (daughters) because of the diminishing genetic relationship of successive generations with originally selected ancestors and because net incomes from each successive generation are more heavily discounted.
Net present value is an economic index that will always lead to correct investment recommendations for producers seeking to maximize profits.
Summary of the 10 highest Net Present Value (PV$) Holstein bulls for the 1:0 milk-to-type selection policy, 50 percent female conception rate and one-generation planning horizon for winter 1985, and averages for all bulls and Elite groups of bulls.
www.agnr.umd.edu /DairyKnowledge/dairy/NET_PRESENT_VALUE_SIRE_SUMMARIES.html   (2068 words)

  
 Net Present Value Analysis Can Aid in Cattle Business Decision Making
An objective answer to the profit potential of cow-calf pairs purchased (or heifers retained) today can be arrived at by conducting a net present value analysis of the cost and income streams associated with owning cows for the next several years.
The financial hopelessness of retaining a raised yearling heifer in today's market environment is brutally illustrated in her net present value of only $473 versus a feeder value of over $800.
The difference between the net present value of a purchased pair and the retained yearling heifer is $1,056.
www.noble.org /Ag/Economics/NetPresentValue   (661 words)

  
 Net Present Value   (Site not responding. Last check: 2007-10-10)
Net Present Value (NPV) is a calculation of the value of future cash flows in present-day currency.
NPV is one of those reasons that managers are always pushing to get software projects completed as soon as possible.
What must keep in mind is that all of the factors used to determine this value, ie discount_rate (interest_rate, inflation), number_of_periods, are estimates, as is the calculated value.
c2.com /cgi/wiki?NetPresentValue   (448 words)

  
 "Net present value" Definition
A calculation which is based on the idea that Ј1 received in ten years" time is not worth as much as Ј1 received now because the Ј1 received now could be invested for those ten years and compound into a higher value.The NPV calculation establishes what the value of future earnings is in today"s money.
The further out the earnings are (in years) the more reduced their present value is. NPV is at the heart of securities analysis.
The further out the earnings are (in years) the more reduced their present value is.NPV is at the heart of securities analysis.
www.level2.ru /dictionary/n/net_present_value.html   (367 words)

  
 How Do I Value a Project?
NPV is the difference between an investment's market value and its cost.
Once this is done, NPV is found as the difference between the present value of the future cash flows and the cost of investment.
NPV assumes that project cash flows are reinvested at the company's required rate of return; the IRR assumes that they are reinvested at the IRR.
www.mtholyoke.edu /~aahirsch/howvalueproject.html   (1014 words)

  
 Present versus the future in Santos battle for Queensland Gas Co | Bryan Frith | The Australian   (Site not responding. Last check: 2007-10-10)
The latter alternative - a directors' valuation - is a seldom employed tactic, perhaps because it exposes the directors to the risk of liability, although there have been some notable examples.
The panel decided that an expert's report wasn't required, but that wherever earnings forecasts or valuations are provided in the context of a takeover bid, the assumptions, data, methodology and the qualifications of those involved (including directors) should be provided.
A discounted-cash-flow valuation to arrive at a net present value would almost certainly have to involve a very wide valuation range, to cater for the possibility of success or failure in proving up further reserves.
www.theaustralian.news.com.au /common/story_page/0,5744,20719437^16941,00.html   (1343 words)

  
 Present value - Wikipedia, the free encyclopedia
The present value of a future cash flow is the nominal amount of money to change hands at some future date, discounted to account for the time value of money.
Because of this present values are smaller than corresponding future values.
The present value of a bundle of cash flows is the sum of each one's present value.
en.wikipedia.org /wiki/Present_value   (781 words)

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