Net Present Value I invest $100 in a project, in year one it returns $150 and in year two it returns $200; assume 5%
{"Image DocumentName": "Net Present ValueI invest  100 in a project, in year one it returns  150 and in year two it returns  200; assume 5%", "Image ImageDescription": "These are future values so I need to discount them to the present values, I use the interest rate to discount my cash flows. This 5% interest rate is the rate that I could earn if I had invested that  100 elsewhere. 150/(1.05^1) + 200/(1.05^2) \u2013 100. Note that we do not discount the 100 dollars I just spent on the project, that is because I just did so; it is not a future value. =", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}