Net Present Value (NPV) measures the present value of an investment, taking into account the sum of its future cash flows discounted appropriately. NPV is calculated by the formula:
$$NPV \mmlToken{mo}[linebreak="auto"]{=}-C_{0}+\sum_{i=1}^{t}\frac {C_{i}}{(1+r)^{i}}$$
C0— initial investment;
r— discount rate (e.g., weighted average cost of capital);
t— number of periods.
As a general rule, all cash outflows should be negative in the formula, while inflows should be positive. The Greek symbol "Σ" (sigma) denotes summation in mathematics.