The value today of a series of future cash flows, minus what it costs to buy them.
NPV discounts each future dollar back to today at your required return. Positive NPV means the deal beats your hurdle; zero NPV is exactly your hurdle — that discount rate is the IRR.
Example: Future cash flows worth $110,000 today for a $100,000 price = +$10,000 NPV.
FAQ
What is NPV in simple terms?
NPV discounts each future dollar back to today at your required return. Positive NPV means the deal beats your hurdle; zero NPV is exactly your hurdle — that discount rate is the IRR.