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LaTeX Math Inline
bodyn

total number of accounting periods 

LaTeX Math Inline
bodyi= 0, 1, 2, 3, ...

running number of accounting period (usually 1 year)

LaTeX Math Inline
bodyr

discount rate

LaTeX Math Inline
bodyR_i = \rm CashIn_i - \rm CashOut_i

free cash flow generated during the

LaTeX Math Inline
bodyi
-th accounting period


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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