Engineering Economics Lecture - MIT OpenCourseWare
NET PRESENT VALUE (NPV) N NPV =∑Cn (1+ i)−n n=1 Examines the total value of all cash flows at time 0. “i” is defined as the rate of return that could be achieved otherwise, or cost of capital. If NPV>0, the project is acceptable. For our sample CFD – The expected rate of return (cost of capital) is 10%
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