Net Present Value : The Net Present Value technique is a discounted of cash flow method, that considers the time value of money in evaluating capital investments. The Net Present Value method uses a specified discount rate to bring all subsequent net cash inflows after the initial investment to their present values. N P V = P r e s e n t v a l u e o f N e t c a s h i n f l o w s − T o t a l Net initial investment Net present value

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Chapter 12, Problem 10E

To determine

Concept Introduction:

Net Present Value:

The Net Present Value technique is a discounted of cash flow method, that considers the time value of money in evaluating capital investments.

The Net Present Value method uses a specified discount rate to bring all subsequent net cash inflows after the initial investment to their present values.

NPV=Present value of Net cash inflows−Total Net initial investment

Net present value

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