Net present value (NPV)
A financial metric used to assess the profitability of an investment by calculating the present value of expected cash flows.
NPV evaluates the profitability of an investment by comparing the present value of cash inflows and outflows. It is crucial for financial planning, investment analysis, and project selection, providing insights into long-term value creation. By considering the time value of money, NPV helps stakeholders assess the financial viability of projects, prioritize investments, and allocate resources effectively, supporting strategic decision-making and sustainable growth.
Used in a sentence
The project's NPV was calculated to determine its financial viability.
Synonyms/variation
Discounted Cash Flow
Stay updated on what’s happening in construction.
Subscribe to Blueprint, Â鶹ÊÓƵ’s free construction newsletter, to get content from industry experts delivered straight to your inbox.
Learn MoreLearn more about Net present value (NPV)
How GCs Can Achieve Better Accountability with Financial Analysis Software
Virtually every general contractor (GC) financially plans for a project before it gets underway. The trouble isn’t necessarily budgeting — it’s monitoring that budget from groundbreak on. Every project has a multitude of moving parts, all while different people report different information at different times. A GC might not really know how the build shook out […]
RIP Expense Reports: How PMs Can Leverage Tech for Precision Spend Management
Mismanaging money costs money. And across construction, random credit card swipes and stray receipts add to the mystery spending that disrupts budgets — and aggravates project mangers. Replace the randomness with cohesion and every aspect of project operations — including materials management, scheduling and budgeting — proceeds more smoothly. Today’s tech-enabled, AI-assisted tools for managing spend […]
What Happens When Data Drives the Business?
Construction has long been seen as a low-margin industry. But what if the real problem isn’t the margins—it’s how decisions get made? In episode 17 of The Power of Construction, we sit down with Indra Gutiérrez, President of Gutier, who’s transforming what’s possible when data drives business decisions. Starting with zero capital, she’s built a […]
How GCs Gain Control and Insight With Budget Tracking Tools
General contractors (GCs) operate on razor-thin margins. The unexpected can easily eat into their profits — or even mean taking a loss on a project. Fortunately, budget tracking tools are giving GCs greater control and insight, helping them protect their bottom line. With these types of tools in play, contracting firms gain the ability to […]
How can we improve this glossary entry?
By clicking this button, you agree to our Privacy Notice and Terms of Service.