Definitions of adjusted present value
a way of calculating the value of an investment that is often used if a company's financial risk is likely to change significantly as a result of some project, investment, or other business decision. The adjusted present value (APV ) method evaluates the project and the impact of financing separately, so can be used if the project has a different financial risk from that of the company.
It is critical for the company to analyze the risk-adjusted present value of each option in order to determine which alternative represents the best means for maximizing shareholder value.