Math Problem Statement
Solution
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Math Problem Analysis
Mathematical Concepts
Net Present Value (NPV)
Internal Rate of Return (IRR)
Payback Period
Benefit-Cost Ratio (B/C)
Formulas
NPV = Σ (CF_t / (1 + r)^t) for t=0 to n
IRR: Discount rate that makes NPV = 0
Payback Period: Time taken to recover initial investment
B/C = Present value of benefits / Present value of costs
Theorems
Time value of money
Discounting cash flows
MARR
Suitable Grade Level
Undergraduate (Economics/Finance)
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