Present & Net Present Value

What are Present Value and Net-Present Value (in terms on PMI PMP)?

Present Value is:

• future value of the money in the today's terms.
• Formula: PV = FV / (1+r)ⁿ
  (where PV = Present Value, FV = Future Value, r = interest rate, n = number of period)

Net Present Value is:

• the present value of the otal benefits (income or revenue)
• allowed for a comparison of many projects and to select the best to initiate