net present value
Today's future dollars
Net present value is a financial measure that calculates what future money is worth today, accounting for the principle that a dollar now is worth more than a dollar later.
It sums up expected future cash flows after discounting them by an interest rate, then subtracts the initial investment.
A positive net present value suggests an investment will be profitable; a negative one suggests it won't.
The project's net present value came out negative, so we passed.
Interest on Fed loans
- cash flowsMovement of funds
- discountingReducing prices offered
- compoundingElements merging progressively
- annuityPeriodic fixed payment
perpetuity · hurdle rate · cost of capital · opportunity cost · inflation adjustment · discounted cash flow
Capacity to generate gain
- expected returnPredicted profit from investment
- surplusAmount exceeding requirement
- shortfallFailure to reach quota
Duration until costs recovered
- return on investmentProfit relative to cost
- decision treeBranching predictive model
- risk assessmentEvaluating likelihood of harm
Assessment of project practicality
- capital allocationDistributing funds among investments
discount rate
Interest on Fed loans
- cash flowsMovement of funds
- discountingReducing prices offered
- compoundingElements merging progressively
annuity · perpetuity · hurdle rate · cost of capital · opportunity cost · inflation adjustment · discounted cash flow
profitability
Capacity to generate gain
- expected returnPredicted profit from investment
- surplusAmount exceeding requirement
- shortfallFailure to reach quota
payback period
Duration until costs recovered
- return on investmentProfit relative to cost
- decision treeBranching predictive model
- risk assessmentEvaluating likelihood of harm
feasibility study
Assessment of project practicality
- capital allocationDistributing funds among investments
leveraged buyout
Debt-funded corporate acquisition
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