What Is Net Present Value (NPV)?

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Meredith Hart
Meredith Hart


Want to make smart investment decisions regularly? Then you need a good understanding of net present value (NPV). Just look at Warren Buffett.


Buffett is an investor, business magnate, and philanthropist. He's known as one of the most successful investors of all time. In fact, he bought his first stock when he was 11 years old and filed for taxes at 13. But guess what? He uses NPV to evaluate investment opportunities.

In this post, you’ll learn about net present value and the NPV formula. Then we’ll cover how to interpret NPV and calculate NPV using Excel.

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