NPV Project Management

May 6th, 2015
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**What is NPV?** a) If the value of NPV is greater than 0, then the project is a go! In other words, it's profitable and worth the risk.b) If the value of NPV is less than 0, then the project isn't worth the risk and is a no-go.

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NPV Project Management**What is NPV?**a) If the value of NPV is greater than 0, then the project is a go! In other words, it's profitable and worth the risk.b) If the value of NPV is less than 0, then the project isn't worth the risk and is a no-go. So NPV takes risk and reward into consideration, which is why we use it in the world of corporate finance and capital budgeting.**Example**In order for us to calculate NPV, let's use the following example.Suppose we'd like to make 10% profit on a 3 year project that will initially cost us $10,000.a) In the first year, we expect to make $3000b) In the second year, we expect to make $4300c) In the third year, we expect to make $5800**Calculation step 1**Right now, the project is going to cost us $10,000. So we won't be making any money until at least a year from now. What we need to do is calculate how much each of those f

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