# Net present value

## Description

In finance, the net present value or net present worth of a time series of cash flows, both incoming and outgoing, is defined as the sum of the present values (PVs) of the individual cash flows of the same entity. Given the (period, cash flow) pairs,where N is the total number of periods, the net present value is the sum of all terms.

Related formulas## Variables

NDV | Net present value (dimensionless) |

N | The total number of periods (dimensionless) |

t | The time of the cash flow (dimensionless) |

R_{t} | The net cash flow (dimensionless) |

i | The discount rate (dimensionless) |