The discounted sum of a project's present and future

cash flows. In theory all projects with positive a NPV should be

viable, though it is common experience that this is not the case. The

interest rate (r) where the NPV is zero is

internal rate of return (IRR).

NPV is generalized:

Σc_{t}/(1+r_{t})^{t} for t = 1..n

- t
- is the zero-base number of the period
- c
- is the signed cash flow
- r
- is the interest rate for period t