Net Present Value (NPV)

The discounted value of a stream of either known future payment flows of costs or benefits based on prevailing rates. The term Net Present Value (NPV) is used to describe the difference between the present value of a stream of costs and a stream of benefits. NPV of debt: the nominal amount outstanding minus the sum of all future debt-service obligations (interest and principal) on existing debt discounted at an interest rate different from the contracted rate.