What do you understand by Net present value?

The Net Present Value (NPV) uses the idea of time value of money to evaluate the viability of an investment option. If an investment decision results in cash outflow at the initial stage and a series of cash inflows over a period of time, then the net present value of the cash flows can be calculated as the difference between the present value of the cash outflow and the sum of the present values of the inflows that accrue over a period of time. The discounting rate used in the calculation of the NPV is the required rate of return from the investment and therefore can be customized to reflect the risk in the market. There are many research houses including 24 Carat Financial Services that extends commodity tips in addition to equity services.
A positive NPV implies that the investment is worthwhile and a negative NPV indicates that the investment should be avoided. The NPV is the present value of the gain from an investment and the magnitude of the gain will help decide between different investment options, provided it is calculated at the name point in time. The constraint in using the NPV is the determining the discounting rate. Moreover, it is assumed to be constant over the life period of investment, which may not hold true. There are many traders who find it difficult to understand and extract useful information in English and hence, 24 Carat Financial Services provides share market tips in Hindi.