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

Question 2

Multiple Choice

Identify the equation for calculating the net present value for a stated period of time, where FtF _ { t } = cash flow in period t, and i is the discount rate.


A) NPV = t=0nFt+i2n\sqrt { \frac { \sum _ { t = 0 } ^ { n } \mid \frac { F _ { \mathrm { t } } + i } { 2 } } { n } }
B) NPV = t0nFt(1+i) t\sum_{t-0}^{n} F_{t}(1+i) ^{t}
C) NPV = t0nFt(1+i) t\sum_{t-0}^{n} \frac{F_{t}}{(1+i) ^{t}}

D) NPV = t0nFti(1+i) t\sum_{t-0}^{n} \frac{F^{t}}{i} \sqrt{(1+i) ^{t}}

Correct Answer:

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