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How do you Calculate NPV when Initial Investments are Unknown?
Mohon
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In calculating NPV when initial investment is not mentioned what should i do? Only cost and benefit from year 1 is given. What would be the power of (1+discount rate) 1 or 0? (...) Read more? Sign up for free
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NPV
Saad Wambangulu
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1 since it is one year from now. Any future cash flow is discounted.
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NPV
Hitesh Jain, Student (MBA), India
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If the time of cost is not given NPV can't be calculated. If the cost incurred is in the beginning of the period it is an investment, if it is later in the period you have to find out the present value of cost.
For example, if the cost is incurred monthly, you have to discount every month's cost and the sum of all discounted costs will be the net present outflow or investment.
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