Question

Provide a brief outline of a NPV analysis paper?

just an Apa outline format for an NPV calculations paper

Answer 1

NPV analysis-

Net present value (NPV) denotes the excess of net present of cash inflow over the net present of cash outflow. This method is used for investment decisions through which a company analyze that whether it should make the specific investment or not.

A positive NPV denotes that the investment has excess PV of cash inflows over the PV of cash outflows, therefore company can go with its decision of investment. Whereas, a negative NPV denotes that the investment has lower PV of cash inflows over the PV of cash outflows, therefore company should modify its decision or scrap the decision.

NPV is calculates by determine the following things-

1. Present value factor - PV factors are calculated for the periods for which investment is made, these factors are calculated with cost to capital to the company.

2. PV of net cash inflow - For calculating NPV firstly we have to calculate net cash flows which will be generated by the investment made by the company, thereafter these net cash inflows will be multiplied with the present value factor..

3. PV of net cash outflow - After calculating the present value of net cash flows company is required to calculate the net cash flows over the period of investment, thereafter these cash outflows will be multiplied with the PV factors.

4. NPV - PV of cash inflows - PV of cash outflows

Format-

	PV of cash Inflow	xxx
Less	PV of cash outflow	xxx
	NPV	xxx