Net Present Value (NPV) is the value of future cash inflows less all cash outflows (including the cost of investment) calculated using an appropriate discount rate. It is calculated as the sum of the present values of all future cash flows less the initial capital investment. The computation of the NPV takes into account the time value of money. The rule of thumb is that when the NPV is positive, the project is viable and vice versa. This rule of thumb seems simplistic as the decision to invest in a project goes beyond positive NPV computations. For viable projects, the higher the NPV, the better as higher NPVs signal superior cash flows from a project. In addition, the size of the terminal value included in the cash flows from which the NPV is computed matters. If the terminal cash flow accounts for 50% or more of the total cash flows used in computing the NPV, the implication is the project cash flows are weak during the forecast period. Also of importance is the duration of the forecast period over which the NPV is generated. If one project generates a certain level of NPV over five years whilst a second project with similar investment generates the same level of NPV over ten years, obviously the first project is more preferable, all things being equal.