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What Does Net Present Value Of Growth Opportunities – NPVGO Mean?

April 26, 2017growth mean NET opportunities PRESENT value

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What Does Net Present Value Of Growth Opportunities – NPVGO Mean?

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A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. The net present value of growth opportunities is used to determine the intrinsic value of a new project or acquisition at a given point in time, based on projected amounts. NPVGO is calculated by taking the net cash inflow, discounted at the firm’s cost of capital, less the purchase price of the additional asset.