How to Use Net Present Value (NPV) Let's say you're contemplating setting up a factory that's going to need initial funds of $250,000 during the first year.

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.

The net present value (NPV) method can be a very good way to analyze the profitability of an investment in a company, or a new project within a company.

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