thinQmaster Virtual testing partner Adaptive practice exams that find your weak spots and drill them. Every answer explained. From $69
Enroll

thinQmaster

Find your exam

Five questions free, before you decide.

Step 1 · choose a vendor

In one of our camps? Your practice exams come with the tuition — they are on your study page already.

Project Management & Agile · Intermediate

Net Present Value (NPV)

The present value of future cash inflows minus the present value of outflows, discounted at a required rate.

Definition

A positive NPV indicates value creation; when selecting projects, choose the highest NPV. Project duration is already factored in by discounting.

Example

Project A NPV $120k vs. Project B NPV $80k: choose A.

Exam tip

Do not divide NPV by years; it already accounts for time.

Related terms