Net present value and the profitability index are helpful tools that allow investors and companies make decisions about where to allocate their money for the best return. Net present value tells us ...

NPV calculates profitability using all projected cash inflows and outflows, considering time value of money. A positive NPV suggests a profitable project; a negative NPV suggests a loss. NPV's ...

The income statement provides a breakdown of sales and expenses, and these can be made or paid with either cash or credit. Because of certain accounting conventions aimed at matching sales and ...