ECONOMICS

Net present value

converts cash flows at different times to the same point in time to evaluate projects.

NPV=∑t=0TCFt(1+r)tNPV=\sum_{t=0}^{T}\frac{CF_t}{(1+r)^t}

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

Same subject formula

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