Net Present Value

[Brian Sealey]

I'm using an investment analysis program that allows me to input NPV (can input a percentage for before tax and after tax to help determine the value of an investment opportunity). My question is how important is it in deciding an investment. From my understanding it is used to compare the current investment to another lower risk option available. The ratios that have been using are 5% before tax and 3% after taxes. Would love feedback on my understanding. Thanks