Calculate the present value of each year's cash flow by dividing by (1 + discount rate)^number of years. Sum all present values to find the total value of projected cash flows, which in this ...

The discount rate is the interest rate used to calculate net present value (NPV). It represents the time value of money. NPV can help companies determine whether a proposed project may be profitable.

Calculating the interest rate using the present value formula can, at first, seem impossible. However, with a little math and some common sense, anyone can quickly calculate an investment's ...