Definition
The discounted business value of nontraditional methods that is used to create software is known as the Net Present Value (NPV). The discount in this case, means to either reduce value, or devalue or lower the expected benefits received from Agile development methods over time. The two ways of increasing profits are : 1) increase its revenues or 2) decrease its costs.
NPV is often a metric that is used to determine the investment potential of a project. It offers a comparison between the present value of your investment, and the future returns that are expected. It takes into account the principle in economics that is refereed to as the “time value of money”, which offers the implication that a currency earned today is more valuable than that earned tomorrow.
Further Reading
- “The Art of Agile Development”(book), by James Shore
