DISCOUNTED CASH FLOW I Let cf(n=the cash flow for the nth time period Recall that the present value py(n ofcf(n is Py(n=CF(n/(+i For a series of n cash flows the net present value (NPy is NPV=∑CF()/1+in This is the discounted cash flow for a series of n cash flows CF(n 10/1899 Engineering economics ll10/18/99 Engineering Economics II 10 DISCOUNTED CASH FLOW I Let CF(n) = the cash flow for the nth time period Recall that the present value PV(n) of CF(n) is PV(n) = CF(n)/(1 + i)n For a series of N cash flows the net present value (NPV) is N NPV = å CF(n)/(1 + i)n i=n This is the discounted cash flow for a series of N cash flows CF(n)