Explain Net Present Value within a Project Appraisal

I need to understand how to apply the Net Present Value to a scheme and discuss its findings.

Answers
hyperion
10 April 2013
This explanation is very comprehensive
hyperion
10 April 2013
In terms of discussing findings, your discount rate will reflect your cost of capital. If the project returns a positive NPV, then it will exceed the organisations cost of capital, and is worth further consideration (in non-financial terms). If it has a negative NPV, then in financial terms it wont help meet the cost of capital, and would need to be justified entirely in non-financial terms. Projects like health and safety often return negative NPV's, yet are undertaken by organisations anyway, often because there is a legal requirement to do so.
hyperion
10 April 2013
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