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April 13, 2018, 10:31:38 AM |
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According to the table “Investment attractiveness” the NPV indicator is higher than . This
confirms the project profitability and shows that all the cash receipts shown to the present value
exceed the funds invested in the project, which indicates the high investments efficiency.
The NPV is the difference between all cash receipts and payments brought to the current time (by
time of the investment project evaluation). It shows the amount of money that the investor expects
to receive from the project, after cash receipts will pay back its initial investment costs and periodic
cash payments associated with the project.
Since cash payments are valued in terms of their cost over time and risks, NPV can be interpreted
as the value added by the project. It can also be interpreted as the total profit that investor gets for
the project period from investing in the implementation of the current project.
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