The answer is net present value. It is the difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to examine the effectiveness of a projected investment or project. A net present value that is positive stipulates that the projected earnings produced by a project or investment surpasses the anticipated costs. In general, an investment with a positive NPV will be a profitable one and the one with a negative NPV will result in a net loss.