What is the net present value？

The net present value (NPV) is a financial calculation that measures the difference between the present value of cash inflows and the present value of cash outflows over a specific period of time. It is used to determine the current value of an investment, taking into account the time value of money and the risk associated with the investment. A positive NPV indicates that the investment is profitable, while a negative NPV indicates that the investment is not profitable.