The net present value formula for one period is: A)NPV = C₀ + [C₁/(1 + r)]. B)NPV = PV required investment. C)NPV = C₀/C₁. D)NPV = C₁/C₀.

Question

Quizplus · Accepted Answer

The correct formula for net present value (NPV) for one period is NPV = Cash Flow in Period 1 / (1 + r), where r is the discount rate. Choice A, despite the garbled text, is the only option that resembles the structure of the NPV formula, indicating cash flow in the numerator and adjusting for the discount rate in the denominator.

The Net Present Value Formula for One Period Is