NPV
Abbreviation with 2 meanings
| Stands for | Net present value |
|---|---|
| Meanings | 2 |
| Categories | Business & Finance, Medical |
NPV has two meanings. It stands for Net present value (finance) or Negative predictive value (medical research).
Meanings of NPV at a glance
| # | NPV stands for | Context |
|---|---|---|
| 1 | Net present value | Business & Finance › Finance |
| 2 | Negative predictive value | Medical › Medical Research |
1. Net present value
Business & Finance · Finance Abbreviations
Sum of a project's future cash flows discounted back to today at a required rate of return, minus the initial investment. A positive NPV means the project is expected to earn more than its cost of capital and should, in principle, be accepted.
Example: At a 10 percent discount rate, the plant expansion has an NPV of $4.2 million, so finance recommends approval.
NPV is considered the theoretically soundest capital-budgeting rule because it measures value created in dollars and handles changing discount rates. Its main weakness is sensitivity to the discount rate and to long-range forecasts. Excel's NPV function assumes the first cash flow arrives at the end of period one, a common source of modeling errors; XNPV handles irregular dates.
2. Negative predictive value
Medical · Medical Research Abbreviations · also used in measurement
Probability that a person with a negative test result truly does not have the condition, calculated as true negatives divided by all negative results. A high NPV makes a test useful for ruling out disease, especially when prevalence is low.
Example: A negative D-dimer has an NPV above 99% in low-probability patients, so PE is effectively excluded.
NPV falls as prevalence rises, so a test that reliably rules out disease in a low-risk clinic may be less reassuring in a high-risk population. Highly sensitive tests yield high NPVs, captured by the mnemonic SnNOut: a sensitive test, when negative, rules out.
Related abbreviations
More finance abbreviations
- MOIC – Multiple on invested capital
- MRR – Monthly recurring revenue
- NewCo – New company
- NOPAT – Net operating profit after tax
- NTM – Next twelve months
- NWC – Net working capital
- OCF – Operating cash flow
- OpCo – Operating company
See all 88 finance abbreviations →
More medical research abbreviations
- NICE – National Institute for Health and Care Excellence
- NME – New molecular entity
- NNH – Number needed to harm
- NNT – Number needed to treat
- NS – Not significant (statistically)
- ODD – Orphan drug designation
- OHRP – Office for Human Research Protections
- OR – Odds ratio
See all 94 medical research abbreviations →
This entry is for general education and is not medical advice. Abbreviation use varies between institutions; always confirm in context.