NPV

Net present value is the current worth of all future earnings from an investment after subtracting the total investment cost. It shows whether a project will create value over time. A positive NPV means the project is expected to be profitable.

• Measures today’s value of future cash flows
  
• Adjusts for interest, time, and inflation
  
• Positive value means financial gain
  

NPV for This Investment

For an investment of three crore with expected yearly profits of seventy lakh over five years and using a standard discount rate, the NPV is positive. This confirms the project’s financial strength.

• Total investment: three crore
  
• Annual return: seventy lakh
  
• Projected NPV: around fifty to sixty lakh

NPV helps decide if a project is worth starting or funding. It compares costs and gains over time in real value terms. It is a trusted tool in industrial and real estate planning.

• Helps in better financial decision-making
  
• Ideal for long-term project evaluation
  

Supports risk assessment and prioritization