What is the net future value?

Net future value (NFV) is a financial metric that calculates the present value of cash flows expected to be generated by an investment in the future, minus the initial investment cost. It is used to determine the profitability of an investment by comparing the expected future cash flows to the initial cost of the investment. A positive NFV indicates that the investment is expected to be profitable, while a negative NFV indicates that the investment is expected to result in a loss.

The net future value (NFV) is the difference between the future value of the cash inflows and the future value of the cash outflows over a specified period of time. It is used to evaluate the financial viability of a project or investment.

The NFV is calculated as follows:

NFV = FV of cash inflows - FV of cash outflows

where:

FV of cash inflows = Present value of cash inflows multiplied by (1 + r)^n
FV of cash outflows = Present value of cash outflows multiplied by (1 + r)^n
r = Discount rate
n = Number of periods

The NFV can be used to make decisions about whether or not to undertake a project or investment. A positive NFV indicates that the project or investment is expected to generate a positive return, while a negative NFV indicates that the project or investment is expected to generate a negative return.