Capital Budgeting
Net Present Value
Definition
What is Net Present Value?
Present valueThe current worth of money expected in the future after applying a discount rate. of expected cash inflows minus present value of expected cash outflows.
Example in practice
How This Looks in Practice
A project with ₦120 million present value of inflows and ₦100 million cost has ₦20 million NPV.
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Related Terms
Capital Budgeting
Internal Rate of Return
The discount rate that makes a project's net present value equal to zero.
Capital BudgetingModified Internal Rate of Return
A return measure that uses specified financing and reinvestment rates rather than assuming reinvestment at the IRR.
Capital BudgetingPayback Period
The time required for cumulative cash inflows to recover the initial investment.
Company DisclosuresAnnual Report
A yearly publication containing financial statements, management discussion, governance information, and other disclosures.