Calculate net present value (NPV)
Preparing your project: financial analyses

Calculating the project's present value enables you to estimate the value of future project income today. It takes into account the time (and cost) it will take to finance your project, and the accumulated income. It can be used to prioritize projects (acceptance and rejection decisions) and the interest they represent for your organization. Net present value (NPV) is calculated as follows (where r is the interest rate and n is the number of project periods):

$$\frac{\text{ valeur future du projet }}{\left(1+r\right)}$$

The projects chosen are always those with the highest NPV.