Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

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 ...

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 ...

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 ...

Definition: The net present value (NPV) of an investment is the present (discounted) value of future cash inflows minus the present value of the investment and any associated future cash outflows.

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 ...

Calculate the present value of each year's cash flow by dividing by (1 + discount rate)^number of years. Sum all present values to find the total value of projected cash flows, which in this example ...