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NPV discounts future cash flows to present value at required return rate. Positive NPV = value-creating investment decision.

Водич корак по корак

  1. 1Input cash flows and discount rate
  2. 2Calculate PV of each cash flow
  3. 3Sum to get total NPV
  4. 4Accept if NPV > 0

Worked Examples

Инпут
Invest $100k, receive $50k/year for 3 years, 10% discount rate
Резултат
NPV ≈ $24,343 (positive, accept project)
Compares to initial outlay

Common Mistakes to Avoid

  • Using wrong discount rate
  • Ignoring timing of cash flows

Frequently Asked Questions

What discount rate to use?

WACC for company projects, required return for personal investments.

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