The project is expected to generate more cash than it costs, after accounting for the time value of money. Accept the project.
Predicting exactly how much a project will earn in five or ten years is part science, part guesswork. net present value
NPV=∑Rt(1+i)t−Initial Investmentcap N cap P cap V equals sum of the fraction with numerator cap R sub t and denominator open paren 1 plus i close paren to the t-th power end-fraction minus Initial Investment Rtcap R sub t : The net cash inflow or outflow during a single period t . The project is expected to generate more cash