Net Present Value (NPV)
Definition
The difference between the present value of cash inflows and outflows over time, used to assess investment viability. Positive NPV indicates the investment is expected to generate value.
Formula / Rules
NPV = Σ(Ct / (1+r)^t) − C0
Example
Positive NPV indicates the investment is expected to generate value above the cost of capital.
Related Terms
Frequently Asked Question
What is NPV?
NPV (Net Present Value) is the difference between the present value of cash inflows and outflows over time. A positive NPV means the investment generates more value than its cost.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.