Definition
Net Present Value (NPV) is an investment assessment method comparing the present value of future financial benefits with the expenditure incurred.
Human Explanation
NPV shows whether an investment creates value after the time value of money is considered.
Why it Matters
It supports comparison of alternatives and more informed long-term decisions.
Conceptual Boundary
Its result depends on scope, data and assumptions and should not be the sole decision criterion.
Practical Perspective
Use it together with risk, cash-flow and strategic assessment.