Net present value (NPV) represents the difference between the present value of cash inflows and outflows over a set time period. Knowing how to calculate net present value can be useful when choosing ...

Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money for the best return. Net present value tells us ...

The basic premise of finance is that money has time value -- a dollar in hand today is worth more than a dollar in the future. The study of finance seeks to make it possible to compare the value of a ...

Calculating the interest rate using the present value formula can at first seem impossible. However, with a little math and some common sense, anyone can quickly calculate an investment's interest ...

When a company is making capital budgeting decisions -- whether it's something as small as buying a new copier vs. servicing an old one or as big as entering a new market -- it must weigh the expected ...

Present value is a useful mathematical formula designed to figure out if money received now is worth more than money received later. What Is Present Value? Terms Associated With the Present Value of ...

Now I (sort of) understand why so many homeowners are in loan modification hell. This Dante's Housing Crisis Inferno has been fanned by the introduction of a simple calculation: the NPV. What's the ...

In the world of finance, an annuity is a contract between you and a life insurance company in which you give the company a lump sum or series of payments, and in return, the insurer promises to ...

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Dr. Melody Bell is a personal finance expert, entrepreneur, educator, and researcher. Melody ...