Net Present Value (NPV) Meaning:NPV is equal to the present value of all future free cash flows less the investment's initial outlay.It measures the net value of a project in today's dollars. FCF:free cash flows k:capitalization rate/cost of capital/opportunity cost/discount WPV=,之PCF (1kn -Initial Outlay =py of Benefits -PV of Costs SJTU ACEM Instructor:Tangzongming 2014 spring 11-7Net PresentValue (NPV)  Meaning: NPV is equal to the present value of all future free cash flows less the investment’s initial outlay. It measures the net value of a project in today’s dollars.  FCF: free cash flows  k: capitalization rate/cost of capital/opportunity cost/discount rate  n: number of years SJTU ACEM Instructor:Tangzongming 2014 spring 11-7 - PV