Net present value (NPV) represents the difference between the present value of cash inflows and outflows over a set time period. Knowing how to calculate net present value can be useful when ...

Internal rate of return (IRR) and net present value (NPV) aren’t always equally effective. Compare NPV vs. IRR to learn which to use for capital budgeting.

IRR is the discount rate that makes the net present value (NPV) of all cash flows from a project equal to zero. It's the expected annual rate of return generated by an investment.