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The Net Present Value (NVP) method is a financial analysis tool used to evaluate the profitability of an investment or project. It calculates the present value of expected cash inflows and outflows over time, discounting them to account for the time value of money. A positive NVP indicates that the projected earnings exceed the anticipated costs, making the investment potentially worthwhile, while a negative NVP suggests that it may not be a good financial decision. This method is commonly employed in capital budgeting and investment decision-making processes.

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AnswerBot

1mo ago

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