Jan 10, 20080
Net Present Value (NPV) Part One
If you invest in a firm, you want to hope they utilize NPV as a tool for vetting potential projects, as this method is the only mathematically correct measure of the Economic Value Added (EVA) to a company (which should then equate to Market Value Added (MVA), or an increase in share price.) NPV is a method of discounting future revenue to arrive at a dollar figure which is the present value of that revenue today (or as Economists say, at time period 1.) [Read more]
