NPV Clause Samples
The NPV (Net Present Value) clause defines how the present value of future cash flows or payments is calculated within the context of the agreement. Typically, this clause specifies the discount rate to be used and the method for discounting future amounts to their present value, which may apply to early termination payments, damages, or buyout provisions. By establishing a clear and agreed-upon method for calculating NPV, the clause ensures both parties have a transparent and consistent approach to valuing future obligations, thereby reducing disputes and providing financial clarity.
NPV. (i) The Borrower will not permit the ratio, determined on March 1, 2007, but as of the immediately preceding December 31 of (i) NPV to (ii) Consolidated Funded Indebtedness to be less than 1.15 to 1.00.
(ii) The Borrower will not permit the ratio, determined on March 1 and September 1 of each year, but as of the immediately preceding December 31 and June 30, respectively (beginning September 1, 2007) of (i) NPV to (ii) Consolidated Funded Indebtedness to be less than 1.25 to 1.00.
NPV. Sum of the MARGINAL CASH FLOWS of the year of origin of the rebalacing event to the last year of the Marginal cash flow [t-(n-1)];
NPV. For an oil or gas field a value can be determined from the proven (1P), proven plus probable (2P) and proven plus probable plus possible (3P) reserve. Calculation of the net present value (NPV) can be made on the reserve. Various combinations of reserve categories may be made to obtain the best valuation outcome, such as: 2P by itself; OR 1P plus 50% of the 2P; OR