Defined term
Net present value
Net present value is the sum of a defined series of cash flows discounted to one valuation date using a stated discount rate and timing convention.
Also known as NPV
economics · Concept code GS-CONCEPT-073 · Last verified August 20, 2026
Evidence through 2023-12-17 · 0 sources have no source-event date
Content modified 2026-08-20
Definition and boundaries
Definition
Net present value is the sum of a defined series of cash flows discounted to one valuation date using a stated discount rate and timing convention.
Definition claim verification: Verified August 20, 2026
In plain language
Use Net present value only after the cash-flow perspective, timing, contract structure, included costs, and omitted items are made explicit.
What it is not
It is not payback period, profit, or a transferable ranking when assumptions differ.
Decision context
Why it matters
Results depend on cash-flow perspective, nominal or real treatment, discount rate, dates, horizon, taxes, residual value, financing, replacements, and included benefits and costs.
Decision-context claim verification: Verified August 20, 2026
Information boundary
This page provides general educational context, not a site design, production guarantee, utility determination, contract interpretation, legal opinion, tax conclusion, or individualized financial advice. Verify property, equipment, utility, jurisdiction, program, and agreement details before acting.
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Learning navigation
Primary topic: Finance
Broader topic
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- Solar project cash flowPublished concept
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Primary sources
- National Renewable Energy Laboratory: System Advisor Model Help
Revision System Advisor Model 2023.12.17 help · Source event as of December 17, 2023 · Ontology accessed August 20, 2026 · Ontology verified August 20, 2026