Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Net Present Value discounts all future cash flows of an investment back to today’s value and subtracts the initial cost, indicating whether the investment creates value.
A way to check if a future stream of cash flows is worth more today than what you’d pay for it.
A positive NPV (using an appropriate discount rate) suggests the investment is worthwhile; closely related to IRR, which finds the discount rate at which NPV equals zero.
A project costing ₹10 lakh today with a discounted future cash flow value of ₹12 lakh has a positive NPV of ₹2 lakh.
NPV = Σ [Cash Flow_t ÷ (1 + r)^t] − Initial InvestmentA way to check if a future stream of cash flows is worth more today than what you’d pay for it.
Net Present Value (NPV) helps you evaluate products, compare options, and make informed decisions aligned with goals, tax rules, and risk tolerance in the Indian financial system.