Net Present Value, otherwise known as NPV, is an accounting term used
             in capital budgeting where the present value of net cash inflow is
             subtracted from the present value of cash outflows. Then this value is
             compared with projected profit ratios for the project in the future. In
             other words, NPV is useful, particularly to investors, because it compares
             the value of a dollar today versus the value of that same dollar in the
             future, after taking inflation and return into account. NPV is also often
             To calculate NPV, the discount rate or cost of capital, or the
             required rate of return, that is the return required for the project to be
             an attractive and profitable investment, the length of the project in years
             and the amount required to initiate the project must be compared with the
             projected net cash flows to be received throughout the life of the project,
             with these ratios today. If the present and future cash outflows are
             likely to be greater than present and future inflows, a negative number
             must be calculated for that net cash flow. (Investopedia, 2004)
             Thus, the NPV is calculated as the present value of the project's cash
             inflows minus the present value of the project's cash outflows. This
             relationship is expressed by the following formulaâ€"the graphic retrieved in
            
• CFt = the cash flow at time t and
            
• r = the cost of capital.
             The total present value of a project's expected future cash flows must
             enough to satisfy the initial cost to make the investment attractive. If
             the NPV of a prospective project is positive, then it should be accepted.
             However, if it is negative, then the project probably should be rejected
             because cash flows are negative. In other words, according to the
             commensurate principle that the future value of money, unless it is
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