net present value

Synonyms

NPV

Definition

The difference between the present value of the benefit flows and the present value of the cost flows for an adaptation measure. The net present value should be greater than zero for a measure to be economically acceptable (UNFCCC< 2014) Present value - The value of a money amount differs when the amount is available at different moments in time (years). To make amounts at differing times omparable and additive, a date is fixed as the ‘present’. Amounts available at different dates in the future are discounted back to a present value, and summed to get the present value of a series of future cash flows. Net present value is the difference between the present value of the revenues (benefits) with the present value of the costs. See also discounting. (IPCC, 2014)

The difference between the present value of the benefit flows and the present value of the cost flows for an adaptation measure. The net present value should be greater than zero for a measure to be economically acceptable (UNFCCC< 2014) Present value - The value of a money amount differs when the amount is available at different moments in time (years). To make amounts at differing times omparable and additive, a date is fixed as the ?present?. Amounts available at different dates in the future are discounted back to a present value, and summed to get the present value of a series of future cash flows. Net present value is the difference between the present value of the revenues (benefits) with the present value of the costs. See also discounting. (IPCC, 2014)

Broader terms

cost benefit analysis