Question: Explain how to calculate the Net Present Value using the formula provide: 1. NOTE: To construct the first cash flow (cf 1 ) at the

Explain how to calculate the Net Present Value using the formula provide: 1.

NOTE: To construct the first cash flow (cf₁) at the very minimum, the new revenue from your strategy(s) must be discounted back to the present value by calculating EBIT and that figure will be your cf_nfor each year. cf₀(initial cost of your strategy), cf₁(discounted cash flow first year), r (opportunity cost of capital, the rate of the next best alternative use of cash/debt/equity resources).

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