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| total number of accounting periods (usually 1 year) |
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| running number of accounting period |
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| discount rate |
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| LaTeX Math Inline |
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| body | --uriencoded--\mbox%7BDCF%7Dmbox%7BCF%7D_i |
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| | LaTeX Math Inline |
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| body | R_{t_i} = \rm Cash_{in}(t_i) - \rm Cash_{out}(t_i) |
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| the net cash flow at time step | LaTeX Math Inline |
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body | t_ifree cash flow generated during the i-th accounting period |
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| R_0 = | rm Cash_{out}(t=0)the volume of cash investment at initial time moment |
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The main idea of NPV is that value of cash today is higher than value of cash tomorrow because immediate cash can be invested readily available investment market opportunities and start brining some profit.
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