# Present value and net present value

Discount cash flows at different times to compare values at the same point in time.

 Method · Accounting and finance


## Core 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 and jurisdiction
 Results are sensitive to estimates of future cash flows and discount rates. They do not guarantee forecasts or investment returns.


## Editorial perspectives
  Conservative assumptions: examine downside scenarios and funding constraints.
 Growth assumptions: state conditions for expansion and the evidence needed.
 

## Sources
 OpenStax · Principles of Finance 2e · Open textbook, second edition
[16.2 Net Present Value (NPV) Method](https://openstax.org/books/principles-finance-2e/pages/16-2-net-present-value-npv-method) Context: General finance theory; not individual investment advice
 Source checked: 2026-10-07
 Independent editorial summary and source link; the original text is not republished.


## Related personas
  [Accountant](https://personawiki.app/en/personas/accountant)

## Translation status
 Editorial English translation of the Korean edition. No professional translation or occupational expert review has been completed. Translation does not change the source jurisdiction.
 Translation prepared: 2026-10-08 · Source fingerprint: kb-759906cc7f9096ae
[Korean source](https://personawiki.app/knowledge/net-present-value)

## API
[JSON document](https://personawiki.app/api/v1/knowledge/net-present-value?lang=en)