Glossary

Glossary

Term Book Chapter Definition
Net Present Value (NPV) Corporate Finance Chapter 5: Capital Budgeting Fundamentals A method that calculates the present value of a project’s cash inflows and outflows, discounted at the company’s cost of capital. It provides a measure of how much value a project adds to the firm.
Net Present Value (NPV) International Finance Chapter 15: Foreign Direct Investment (FDI) A measure used to evaluate the viability of a project based on its predicted cash inflows and outflows.
Net Present Value (NPV) Venture Finance Chapter 18: Measuring Returns on Investment The difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project.