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Category: Acceptance
Word Count: 789
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NPV approach in investment appraisal

     NET PRESENT VALUE     
1.1.     What is NPV?
NPV can be defined as
     Discounted cash flows method of investment appraisal where it calculates the present value of future cash flows from an investment after netting out initial expenditure.
     The residual profit or loss after all expenses has been covered in present value terms.
     In simple words, The NPV approach asks if the present value of cash inflows less the initial investment is positive, at the current borrowing rate.

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