Net Present Value
By: Ray Myers, Jr., PMP
Net Present Value (NPV) is a measure of the net benefit of a project in terms of today’s dollars. NPV is a financial analysis technique that considers:
- Timing of cash flows
- Time value of money
Projects with positive NPV add value to a firm, while projects with negative NPV diminish value and should not be pursued.
NPV is the difference between the present value of cash inflows and the present value of cash outflows
NPV Formula
Project NPV = Present Value (with project) – Present Value (without project)
About the Author: Ray Myers, Jr. is a PMP certified project manager with over 2o years experience planning and managing technology projects. Contact Ray at wwwpmservicesnw.com
Article source: www.pmservicesnw.com
