Can you tell me the difference between NPV and cashflow?
- Sam | Chicago
Cashflow is the amount of cash you expect to make in the current of future period(s). NPV is what that cash flow is worth today. ie if you were to make $10 5 years from now, it would not be worth $10 today. If we say it is worth only $7 today, $10 is the cash flow and $7 is the NPV.