Net present value of a profit signature

Computes the Chapter 17 net present value: $$ NPV = \sum_{t=0}^{n}\frac{\Pi_t}{(1+r)^t}. $$

Usage

NPV_profit(Pi, r)

Arguments

Pi

Profit signature vector.

r

Risk discount rate.

Value

Numeric scalar.

Examples

Pi <- c(-15.00, 8.42, 8.39, 8.58)
NPV_profit(Pi, r = 0.10)
#> [1] 6.034711