{"id":"net-present-value","title":"Present value and net present value","summary":"Discount cash flows at different times to compare values at the same point in time.","concepts":["Cash flows: timing and amounts of actual inflows and outflows","Discount rate: assumptions about time and risk","Net present value: present value of inflows less outflows"],"application":"State cash flows, discount rates and time horizons when comparing projects, and compare outcomes under changed assumptions.","limitations":"Results are sensitive to estimates of future cash flows and discount rates. They do not guarantee forecasts or investment returns.","directions":["Conservative assumptions: examine downside scenarios and funding constraints.","Growth assumptions: state conditions for expansion and the evidence needed."],"category":"Accounting and finance","kind":"method","kind_label":"Method","persona_ids":["accountant"],"revision":1,"updated_at":"2026-10-07T00:00:00.000Z","sources":[{"title":"16.2 Net Present Value (NPV) Method","url":"https://openstax.org/books/principles-finance-2e/pages/16-2-net-present-value-npv-method","publisher":"OpenStax · Principles of Finance 2e","edition":"Open textbook, second edition","region":"General finance theory; not individual investment advice","checked_at":"2026-10-07","reuse":"Independent editorial summary and source link; the original text is not republished."}],"review":{"status":"source-checked-editorial","expert_reviewed":false},"editorial_note":"Editorial English translation of the Korean edition. No professional translation or occupational expert review has been completed. Translation does not change the source jurisdiction.","language":"en","translation":{"status":"current","source_language":"ko","source_version":"kb-759906cc7f9096ae","translated_at":"2026-10-08","professional_reviewed":false},"trust":"reference-data","version":"kb-f4a2d7a5c23325d5","links":{"document":"/en/knowledge/net-present-value","markdown":"/en/knowledge/net-present-value.md","api":"/api/v1/knowledge/net-present-value?lang=en"}}