Nettonykyarvo
Nettonykyarvo, or net present value (NPV), is a financial metric used to assess the profitability of an investment or project. It measures the value today of expected future cash inflows and outflows, discounted at a chosen rate, minus the initial investment. The standard formula is NPV = sum from t=1 to n of CF_t / (1 + r)^t − I0, where CF_t is the net cash flow in period t, r is the discount rate (often the cost of capital or required return), n is the project horizon, and I0 is the initial outlay.
Interpretation and use: A positive NPV indicates the project is expected to add value above the required
Limitations and considerations: NPV relies on estimates of future cash flows and the discount rate, both of