Net Present Value (NPV)
Another time value of money concept that has to do with serial payments is net present value, or NPV . This calculation is a more complex version of the basic present value calculation mentioned earlier. Under a net present value calculation, the present value of each future cash inflow and outflow is figured. Then the results are added to determine whether, in the present, the project has a positive value or negative value for a company or investor.
For example, if a company was going to invest $10,000 today, receive $4,000 each of the next three years, and then have to pay an additional $1,000 to exit the investment, an investor or company would want to know if they’re losing money when the time value of money is considered.
Assuming an 8% annual interest rate, the calculation may look something like this, with the present values of money flowing out represented by negative numbers and money flowing in represented by positive numbers:
Cash Flows
Present Value
Initial Investment
– $10,000
– $10,000
Year #1 Payment
+ $4,000
+ $3,704
Year #2 Payment
+ $4,000
+ $3,429
Year #3 Payment
+ $4,000
+ $3,175
VIDEO
Since you're reading about Series 65: Net Present Value (NPV) , you might also be interested in:
Please Enable Javascript
TESTIMONIALS
What are people saying?
I finally passed the Series 65! I’m writing today to send you a very sincere Thank you for all the professional support and emotional guidance you have provided. I was emotionally beat up and almost ready to give in on my endeavor of passing the Series 65 and becoming an Investment Advisor Firm.
After becoming unemployed and having a tremendous time focusing on the study material, you provided additional months and material access for no additional Fee! You also mentioned I should be able to teach the material and then I’ll be ready for the exam. By the gracious caring and professional sharing of your wisdom, it provided me to find my path to passing the Series 65!
The three items that really helped was to Study like I’m going to teach it, memorizing and learn by over studying, and getting plenty of sleep and rest.
Thank you to you, your family, and pro team for all you have done. I am very blessed and humbled to have met you all in this challenging time of my life. Happy Holidays, and Have a Safe and Happy New Year!
Michael Jones. Kansas City, MO
I passed my series 65 exam on the first attempt! The books and sample questions are always very helpful. I leveraged this course with another program that was offered to me. I did mainly use this one and found the material very helpful. Overall, I would say the test questions that were in the book and online were much more difficult than the exam itself. I do like the crash course piece, but would also love the option of a instructional video which is what the other course offered. I learn not just by readying, but visually as well. The combination of the two were very helpful, but overall I felt the material, especially the sample test questions, were more comprehensive. Thank you for the material.
Ken Kramer
I am so happy to say that took my Series 65 Exam and passed on my first attempt! All thanks must go to Solomon Exam Prep and its materials. I read the Study Guide cover to cover 3 times, took notes and took what felt like endless practice quizzes, but I must say that I found the practice questions more difficult than the actual exam! I cannot recommend Solomon Exam Prep enough!
Kevin Blanchard, Meche and Associates. Breaux Bridge, LA
I passed the series 65! I used the Solomon exam prep Material to take the series 65. I had previously used the Kaplan material and did not find the materials to be that good. The book, audio tape and exam question bank were amazing. It was hard to go to the center wearing a mask during this Coronavirus time period. I don’t think I would’ve passed this Series 65 without Solomon. Thank you
Gail Abrams, The Investment Center, Inc. Watchung, NJ
I have been extremely happy with your book series. I was able to pass the Series 66 and Series 65 with flying colors on the first try! Thanks again.
Christian Brown, Financial Decisions Group
The Series 65 was a tough exam, but thanks to Solomon I passed at the first attempt. The Solomon Exam Prep Course covered every single aspect in detail. The material was not only important to pass the exam, but it is extremely helpful in the job as investment adviser representative.
Isabel Fliss
CoreCap Advisors
Southfield, MI
Read more reviews
