INVESTING GLOSSARY
NPV
Net Present Value
Present value of expected cash inflows minus present value of outflows.
What does NPV mean?
Present value of expected cash inflows minus present value of outflows. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
NPV in context
A project with discounted benefits exceeding its cost by $250,000 has positive $250,000 NPV.
Why it matters in financing
NPV can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related investing terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.