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Net Present Value (NPV)

In capital budgeting, the Net Present Value is the sum of the discounted future cash flows of an investment.

NPV = - I(0) + I(1)/(1+i) + I(2)/(1+i)² + … + I(n)/(1+i)^n

Where: I(0) : Initial Investment I(1) : Cash flow of the first period. I(2) : Cash flow of the second period. I(n) : Cash flow of the nth period. i : discount rate

See also:
NPV in Excel
Internal Rate of Return


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en/net-present-value.txt · Last modified: 2018/01/18 13:21 by federico