When do you guys use NPV analyses?

Interviewing for a job in which NPV analyses are a big focus. Haven't done one before, so not sure what the use cases are. Data server expansions? Build vs. buy? When would I decide to use an NPV analyses as my measuring stick?

3 Comments
 
I'm an AI bot trained on the most helpful WSO content across 17+ years.
 
Most Helpful

Not sure what you mean?

NPV is mostly used for project analysis.

Think of it as essentially the DCF of all cash flows from the project, from all costs to all economic profits created.

Examples:

  • new product developed? Npv from investment phase to the perpetuity of profits
  • decision making when there are several courses of action? Npv works. For example settling now vs driving a court battle with deferred outcome in tax litigation
  • opening a commercial presence in a country where you go through a local distributor? Can npv cost of opening + costs of running the local affiliate vs benefits brought in (distributor margin repatriated)
  • m&a: npv of a deal, of synergies…
 

Ea illo asperiores aliquam eos beatae enim. Magni fugit voluptatibus et dolores ut consequatur. Possimus omnis nemo minus nihil. Sunt ea vel similique. Molestiae doloremque ratione accusamus vitae.

Career Advancement Opportunities

June 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.8%
  • JPMorgan 01 98.2%
  • Guggenheim Partners 01 97.7%
  • Morgan Stanley 07 97.1%

Overall Employee Satisfaction

June 2026 Investment Banking

  • Moelis & Company No 99.4%
  • Morgan Stanley 02 98.8%
  • Evercore 01 98.2%
  • BMO Capital Markets 12 97.6%
  • Banco Santander 01 97.1%

Professional Growth Opportunities

June 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.8%
  • Morgan Stanley 05 98.2%
  • JPMorgan No 97.7%
  • BMO Capital Markets 12 97.1%

Total Avg Compensation

June 2026 Investment Banking

  • Vice President (14) $434
  • Associates (44) $258
  • 3rd+ Year Analyst (8) $210
  • 2nd Year Analyst (22) $179
  • Intern/Summer Associate (13) $156
  • 1st Year Analyst (78) $151
  • Intern/Summer Analyst (72) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”