Net present value of growth opportunities is a calculation of the net present value of all future cash flows involved with a potential acquisition.

A net present value calculation is a good way to identify the direct cost comparison of leasing versus buying a car, for example.

When net present value is less than zero, the project is expected to lose money. Projects with a negative net present value should be avoided.

Net Present Value Method Under the net present value (NPV) method, you examine all the cash flows, both positive (revenue) and negative (costs), of pursuing a project, now and in the future.

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 net present value (NPV) method can be a very good way to analyze the profitability of an investment in a company, or a new project within a company.

The net present value (NPV) method can be a very good way to analyze the profitability of an investment in a company, or a new project within a company.

How net present value works The basic tenet of the net present value method is that a dollar in the future is not worth as much as one dollar today.

Here's an explanation and simple example of how to calculate the present value of free cash flow.

Below, we'll show you how to calculate the present value of a stream of free cash flows expected over several years. Calculating present value example ...