What is npv formula?
Net present value (NPV) is a method of balancing the current value of all future cash flows generated by a project against initial capital. NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project. Formula for NPV NPV = (Cash flows)/( 1+r)i. The NPV formula is a way of calculating the Net Present Value (NPV) of a series of cash flows. NPV Formula · Z1 = Cash flow in time 1 · Z2 = Cash flow in time 2 · r = Discount rate · X0.