The NPV of a project is the difference between an investment's net operating profit after taxes and the cost of funds used to finance the investment, which is found by multiplying the dollar amount of the funds used to finance the investment by the firm's weighted average cost of capital.

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The NPV (Net Present Value) of a project is calculated by discounting the future cash flows from the investment back to their present value using the firm's weighted average cost of capital (WACC) and then subtracting the initial investment cost. It does not directly involve the net operating profit after taxes or a simple multiplication of the funds used by the WACC.

The NPV of a Project Is the Difference Between an Investment's