ECONOMICS

Detailed explanation-1: -Net present value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. NPV is used in capital budgeting and investment planning to analyze the profitability of a projected investment or project.

Detailed explanation-2: -The difference between the present value of future cash flows and the initial cost is called net present value. It is the most popular capital budgeting technique that is used to determine the profitability of an investment.

Detailed explanation-3: -Present Value (PV) = FV / (1 + r) ^ n FV = Future Value. r = Rate of Return. n = Number of Periods.

Detailed explanation-4: -Present value (PV) is the current value of a future sum of money or stream of cash flows given a specified rate of return. Future cash flows are discounted at the discount rate, and the higher the discount rate, the lower the present value of the future cash flows.

Detailed explanation-5: -The present value formula is PV=FV/(1+i)n, where you divide the future value FV by a factor of 1 + i for each period between present and future dates.