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Net Present Value (NPV) sums all future cash flows discounted to today's value minus the initial investment. Positive NPV means the investment creates more value than it costs.

Wzór

NPV = Σ [Cₜ / (1+r)ᵗ] − C₀; If NPV > 0, project is value-accretive
C₀
Initial investment (outflow) (Currency)
Cₜ
Cash inflow in period t (Currency)
r
Discount rate (Annual percentage)
t
Time period (Years)

Przewodnik krok po kroku

  1. 1NPV = Σ Cₜ/(1+r)ᵗ − Initial investment
  2. 2r = required discount rate (cost of capital)
  3. 3NPV > 0: invest; NPV < 0: reject
  4. 4Higher discount rate → lower NPV

Rozwiązane przykłady

Wejście
−$50k initial, $15k/yr for 5yr, 10% discount rate
Wynik
NPV = +$6,862 → invest

Często zadawane pytania

How do I choose the discount rate?

Use your weighted average cost of capital (WACC) or hurdle rate. 10% for stocks, 5–8% for real estate, 3–5% for bonds. Higher rate = stricter NPV test.

What does negative NPV mean?

Project doesn't meet your return threshold. In theory, reject it. In practice: real-world factors (strategic, competitive, optionality) may justify it anyway.

Does NPV account for risk?

Partially, via discount rate. Higher risk = higher discount rate = lower NPV. But NPV doesn't handle big downside scenarios—use scenario analysis + NPV together.

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