A company's net cash inflow is composed of sales, minus total fixed costs and total variable costs. Total fixed costs are those that do not fluctuate with output, and include annual depreciation costs ...

John Egan is a veteran personal finance writer whose work has been published by outlets such as Bankrate, Experian, Newsweek Vault and Investopedia. Michael Adams is a former Cryptocurrency and ...

NPV calculates profitability by considering all cash flows and the time value of money. A positive NPV indicates a potentially profitable investment opportunity. NPV's effectiveness relies on accurate ...

Calculate the present value of each year's cash flow by dividing by (1 + discount rate)^number of years. Sum all present values to find the total value of projected cash flows, which in this example ...

Cash flow is a measurement of the money moving in and out of a business, and it helps to determine financial health. Many, or all, of the products featured on this page are from our advertising ...

The basic premise of finance is that money has time value -- a dollar in hand today is worth more than a dollar in the future. The study of finance seeks to make it possible to compare the value of a ...

Claire Boyte-White is the lead writer for NapkinFinance.com, co-author of I Am Net Worthy, and an Investopedia contributor. Claire's expertise lies in corporate finance & accounting, mutual funds, ...

Daniel Jassy, CFA, is an Investopedia Academy instructor and the founder of SPYderCRusher Research. He contributes to Excel and Algorithmic Trading. Suzanne is a content marketer, writer, and ...

Calculating the internal rate of return, or IRR, of an investment is a powerful tool for businesses. When a manager is faced with a capital intensive decision, IRR can quickly compare the financial ...