Calculating net present value (NPV) is essential for evaluating investment opportunities. NPV measures the present value of future cash flows, discounted back to the present at a specified rate. However, sometimes the discount rate may not be readily available or agreed upon.
Understanding how to calculate NPV without a given discount rate is crucial for financial professionals, investors, and business decision-makers. This approach allows for flexibility and customization when assessing investment options, particularly in situations where there is uncertainty or disagreement regarding the appropriate discount rate to use.