project management glossary

negotiation objectives

 The objectives with which each party enters into negotiation.

net book value

 The dollar amount shown in the accounting system for assets, liabilities, or equity. When comparing firms, the net book value is the excess of total assets over total liabilities.

net present value (npv)

 The difference between the discounted present value of benefits and the discounted present value of costs.

 When a Rate of Return is applied to the stream of annual cash flows resulting from a project investment, it is possible to calculate whether the discounted value is greater than the cost of the investment. In times of high interest and inflation especially, the method gives more accurate results than simple pay back periods and average return.

 Aggregate of future net cash flows discounted back to a common base date, usually the present.

 The difference between the present value of the cash flows generated by a project and its capital cost. It is calculated as part of the process of assessing and appraising investments.

 See Present Value.