Nett Present Value

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Although I know what this and how too work it out,I am struggling to find a clear and concise definition.Any ideas?

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Nett Present Value

    Hi.

    Net Present Value is the difference between the present value of cash inflows and the present value of cash outflows.

    Scott.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Re:Nett Present Value

    The NPV calculation establishes what the value of future earnings is in today's money. To do the calculation you apply a discount % rate to the future earnings. The further out the earnings are (in years) the more reduced their present value is.

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