Net Present Value Rule

See: Net Present Value.

It seems like a simple concept, but one thing they teach you in business school: no concept is too simple for a name or an equation. Thus, we get the Net Present Value Rule, which stands next to the Keep Breathing Rule and the Don’t Eat Poo Poo Rule in the pantheon of obvious guidelines.

The Net Present Value Rule states that companies should only put money into ventures with a positive net present value. Basically, only chase investments that look like winners. The corollary of this states that you shouldn't throw money into projects with a negative net present value.

Put money into investments likely to make money. Don't put money into investments likely to lose money. The Net Present Value Rule, ladies and gentlemen. Also, keep breathing and don't eat poo.