time passed since the first investment ( assuming that )
the net cash flow at time step
the volume of cash investment at initial time moment
[ See also Net Present Value @ Wikipedia ]
A popular mechanism of measuring the profit with account discount
NPV = \sum_{i=0}^n \frac{R_{ti}}{(1+r)^{t_i}} = R_0 + \sum_{i=1}^n \frac{R_{ti}}{(1+r)^{t_i}} |
where
| total number of time steps | |
time passed since the first investment ( assuming that | |
| the discount rate, i.e. the return that could be earned per unit of time on an investment with similar risk, which is assumed constant over time | |
the net cash flow at time step | |
the volume of cash investment at initial time moment |