# Present Value $ PV = \frac{C_n}{(1 + r)^n} $ - PV = Present Value - C = [[cashflow|Cash Flow]] - r = Discount rate or discount factor (when evaluating an investment, the [[hurdle-rate]]), the key assumption - n = period ## NPV Can be used to [[roi|evaluate an investment]]. $ NPV = \sum_{i=1}^n \frac{C_i}{(1 + r)^i} - C_0 $ - $C_0$ = initial investment (first year) - Discounted or current value of future [[cashflow]]s - Considers time-value of money - Considers [[hurdle-rate]] Available as an [Excel function](https://support.microsoft.com/en-us/office/npv-function-8672cb67-2576-4d07-b67b-ac28acf2a568)