ABSTRACT
1 If we have an investment −100, 50, 150, and we are given a rate of interest or discount rate of 10 per cent per annum, the DPV of the net benefits alone that are generated by the initial outlay of 100, 50 at the end of the first year, and 150 after the second year is given by the calculation 50 1 + 0.1 + 150 1 + 0.1 2 = 169.4 https://s3-euw1-ap-pe-df-pch-content-public-p.s3.eu-west-1.amazonaws.com/9781351029780/90fa3a47-eea2-4a9f-986c-eaffa6b3abad/content/unmath23_1.tif"/> In this connection, an initial outlay of 100 has a present value also of 100, being incurred at the end of the zeroth year.
