Knowing how to calculate net present value can be useful when choosing investments. In a nutshell, an investment's NPV can help you to analyze its potential for profit.

Net present value (NPV) represents the difference between the present value of cash inflows and outflows over a set time period. Knowing how to calculate net present value can be useful when ...

How to Use Net Present Value (NPV) Let's say you're contemplating setting up a factory that's going to need initial funds of $250,000 during the first year.

Learn how to calculate the net present value (NPV) of your investment projects using Excel's XNPV function.

Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money for the best return.

Reviewed by Thomas J. Catalano Fact checked by Vikki Velasquez The discount rate refers to the interest rate used when calculating the net present value (NPV) of an investment. It represents the ...

Everything you need to know to calculate an interest rate with the present value formula.

As with the present value of an annuity, you can calculate the future value of an annuity by turning to an online calculator, formula, spreadsheet or annuity table. You’ll need this information: ...

Calculating a profitability index The next step is to use the information from the net present value calculation to determine a profitability index for the investment.