what is adjusted present value apv 
the adjusted present value is the net present value npv of a project or company if financed solely by equity plus the present value pv of any financing benefits which are the additional effects of debt by taking into account financing benefits apv includes tax shields such as those provided by deductible interest the formula for apv is adjusted present value unlevered firm value ne where ne net effect of debt begin aligned text adjusted present value unlevered firm value ne textbf where text ne net effect of debt end aligned adjusted present value unlevered firm value newhere ne net effect of debt the net effect of debt includes tax benefits that are created when the interest on a company s debt is tax deductible this benefit is calculated as the interest expense times the tax rate and it only applies to one year of interest and tax the present value of the interest tax shield is therefore calculated as tax rate debt load interest rate interest rate 