Question

What are some of the area's consumers, rather than business firms, might use net present value analysis to make decisions? Be sure you review the method and goals of such analysis before trying to respond to this question.

Answer 1

The NPV calculation is one of the several methods which is used to determine the present value of the project's projected future income. In computation of NPV, the present value of the project's cost is subtracted from the present value of future income. A positive net present value indicates that the project should be accepted or implements the project. Business owners while making the comparison of two or more projects tend to favor the one with the higher net present value

Financial concepts such as "Time value of money" and "Net present value" are important methods of quantifying opportunity costs which can be used by a consumer given a particular timeframe to know about your next-best potential return, and can figure out whether or not a particular investment is worth the asking price. Also it's significant uncover the implicit costs behind the decisions a consumer intend to make before any move forward, the better decisions will be.