nettonuværdi

Nettonuværdi is a financial metric used to assess the profitability of an investment by calculating the present value of expected cash inflows minus the present value of cash outflows, reflecting the time value of money. In Scandinavian contexts, the term is used for the same concept as net present value (NPV).

Calculation is based on discounting future cash flows to their present value and summing them, typically expressed as NPV = ∑_{t=0}^{N} CF_t / (1 + r)^t, where CF_t are net cash flows in period t and r is the discount rate. The initial investment is usually CF_0 and is treated as a cash outflow (negative). A common variant is NPV = -I0 + ∑_{t=1}^{N} CF_t/(1+r)^t.

Use and interpretation: A positive nettonuværdi indicates the project is expected to generate value above the required return and may be considered for acceptance. A negative value suggests the investment would destroy value. The metric is a central tool in capital budgeting for comparing projects with different sizes and timing of cash flows.

Considerations and limitations: Results depend on estimated cash flows and the chosen discount rate, which reflect risk and opportunity cost. NPV can be sensitive to small changes in r or cash flows and assumes reinvestment of interim cash flows at the discount rate. It does not capture non-financial strategic benefits and often benefits from scenario or sensitivity analysis.

Related terms include discount rate, cash flow, profitability index, internal rate of return (IRR), and payback period.