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From The Glossary »

Net Present Value (NPV):

An approach used in capital budgeting where the present value of cash inflow is subtracted from the present value of cash outflows. NPV compares the value of a rand today versus the value of that same rand in the future after taking inflation and return into account. If the NPV of a prospective project is positive then it should be accepted, but if it is negative then the project probably should be rejected because cash flows are negative.

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