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Net Present Value Defined & Discussed

By Sam Swenson, CFA, CPA – Updated Dec 18, 2024 at 10:50AM

Key Points

  • NPV calculates profitability by considering all cash flows and the time value of money.
  • A positive NPV indicates a potentially profitable investment opportunity.
  • NPV's effectiveness relies on accurate input data and is less useful for comparing projects.
Key findings are powered by ChatGPT and based solely off the content from this article. Findings are reviewed by our editorial team. The author and editors take ultimate responsibility for the content.

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