Net present value
converts cash flows at different times to the same point in time to evaluate projects.
symbols, variables and units
CF_t: cash flow at time t; r: discount rate for each period; NPV: amount.
applicable conditions and boundaries
r>−1; risk, inflation and currency calibers need to be consistent.
formula source code
The following is a copyable LaTeX expression.
NPV=\sum_{t=0}^{T}\frac{CF_t}{(1+r)^t}Reference and Extended Learning
OpenStax · Principles of Economics ↗is organized according to model definition and assumptions. Please check actual conditions and original literature before engineering, research and clinical use.
NPVInvestment Evaluation