Present value of costs

Present value of costs

Present value of costs is a term used in cost-benefit analysis and project appraisal that refers to the discounted sum, or Present value, or a stream of costs associated with a project or proposal.


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  • present value — The amount of cash today that is equivalent in value to a payment, or to a stream of payments, to be received in the future. To determine the present value, each future cash flow is multiplied by a present value factor. For example, if the… …   Financial and business terms

  • present value factor — factor used to calculate an estimate of the present value of an amount to be received in a future period. If the opportunity cost ( opportunity costs) of funds is 10% over next year, the factor is [1/(1 + 0.10)]. Bloomberg Financial Dictionary …   Financial and business terms

  • Net present value — In finance, the net present value (NPV) or net present worth (NPW)[1] of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values (PVs) of the individual cash flows of the same entity. In the case when… …   Wikipedia

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  • Value engineering — is a systematic method to improve the value of goods and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost. It …   Wikipedia

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  • value — I UK [ˈvæljuː] / US [ˈvælju] noun Word forms value : singular value plural values *** 1) a) [countable/uncountable] the amount that something is worth, measured especially in money You can t put a value on a human life. value of: The value of the …   English dictionary

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