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Net Present Value
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Calculating the NPV

Net Present Value (NPV) Formula

Net Present Value (NPV) Formula

NPV is the sum of of the present values of all cash flows associated with a project. The business will receive regular payments, represented by variable R, for a period of time. This period of time is expressed in variable t. The payments are discounted using a selected interest rate, signified by the i variable.

Source

    Boundless vets and curates high-quality, openly licensed content from around the Internet. This particular resource used the following sources:

    "Net present value."
    http://en.wikipedia.org/wiki/Net_present_value Wikipedia GNU FDL.

Related Terms

  • cash flow
  • variable
  • discount rate
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