Economics Stock Market Questions
The net present value (NPV) is a financial metric used to determine the profitability of an investment or project. It calculates the difference between the present value of cash inflows and the present value of cash outflows over a specific time period. A positive NPV indicates that the investment is expected to generate more cash inflows than outflows, making it potentially profitable. Conversely, a negative NPV suggests that the investment may result in a net loss.