Identify the equation for calculating the net present value for a stated period of time, where $F _ { t }$ = cash flow in period t, and i is the discount rate.
A)NPV = $\sqrt { \frac { \sum _ { t = 0 } ^ { n } \mid \frac { F _ { \mathrm { t } } + i } { 2 } } { n } }$
B)NPV = $\sum_{t-0}^{n} F_{t}(1+i)^{t}$
C)NPV = $\sum_{t-0}^{n} \frac{F_{t}}{(1+i)^{t}}$

D)NPV = $\sum_{t-0}^{n} \frac{F^{t}}{i} \sqrt{(1+i)^{t}}$

Question

Identify the equation for calculating the net present value for a stated period of time, where $F _ { t }$ = cash flow in period t, and i is the discount rate.
A)NPV = $\sqrt { \frac { \sum _ { t = 0 } ^ { n } \mid \frac { F _ { \mathrm { t } } + i } { 2 } } { n } }$
B)NPV = $\sum_{t-0}^{n} F_{t}(1+i)^{t}$
C)NPV = $\sum_{t-0}^{n} \frac{F_{t}}{(1+i)^{t}}$

D)NPV = $\sum_{t-0}^{n} \frac{F^{t}}{i} \sqrt{(1+i)^{t}}$

Quizplus · Accepted Answer

The equation for calculating the net present value (NPV) is the sum of the cash flows discounted at the given discount rate using the formula NPV = $\sum_{t=0}^{n} \frac{F_t}{(1+i)^t}$. Option A is incorrect because it doesn't use the discount rate in the formula. Option B is incorrect because the cash flows are not divided by a discount factor. Option D is incorrect because it uses the square root function in the formula which is not necessary for calculating NPV.

Identify the Equation for Calculating the Net Present Value for a Stated