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The Income/Outcome® Contextuarya visual glossary of corporate finance |
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We use "business visualization" to graphically simplify complex business concepts (and increase business acumen). To get more information on business visualization, please see "The Company Board" (our business results visualizer) and Income/Outcome (our customizable business simulation).
The following are our generic explanations of common corporate financial terminology. Actual meanings can vary wildly from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"
To get more information about the authors, please see our Directory of Contributing Editors.
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NPV is used to determine when, if ever, a capital investment will generate a profit, and how much that will be in today’s terms. The Net cash flows are considered in today’s terms (i.e. Present Value), because the money that comes in next year will be worth less than the money that goes out this year.