A Literature Review on the Net Present Value (NPV) Valuation Method

DOI

10.2991/aebmr.k.220603.135How to use a DOI?

Keywords

Net present value (NPV); Internal rate of return (IRR); Projects management; Evaluation methods; Capital budgeting techniques

Abstract

Evaluating different projects is an essential part of capital investment for the firm’s future success. Among several evaluation methods, the net present value (NPV) methodology enjoys the highest prevalence. NPV method allows investors to objectively evaluate the efficacy and appeal, as well as compare investment projects that differ in scope, duration, or predicted profit. This article aims to illustrate the basic characteristics of the NPV method, as well as the benefits and shortcomings while applying it. This work could give users comprehensive learning about NPV and facilitate investors to judge whether it is appropriate to choose the NPV method for specific projects management. Besides, the article also provided a comparison between several methods, such as the internal rate of return method, in which case users can better choose the most suitable methods or apply all of them together.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

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TY  - CONF
AU  - Tianle Shou
PY  - 2022
DA  - 2022/07/01
TI  - A Literature Review on the Net Present Value (NPV) Valuation Method
BT  - Proceedings of the 2022 2nd International Conference on Enterprise Management and Economic Development (ICEMED 2022)
PB  - Atlantis Press
SP  - 826
EP  - 830
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220603.135
DO  - 10.2991/aebmr.k.220603.135
ID  - Shou2022
ER  -