Let’s put Net Present Value Analysis into terms the layman understands. it’s really not that complicated. It’s a process that allows an entrepreneur or an investor to see the future so to speak.
When you borrow money to finance a business it’s an instant net loss because of the down payment and eventual interest. What NPVA does is project for that investor, what his investment looks like in future dollars. If the assigned rating is in the positive, you have a viable business plan that’s likely to make money.
NPVA is a highly developed process. It’s all in an effort to help the entrepreneur make sound financial decisions and grow their business. We depend on the little guy to raise the floor for the betterment of all…well so states the following interesting article in Entrepreneur Magazine.
Read the full article here: