Identify all expected cash inflows and outflows for each period
Choose the discount rate
Discount each future cash flow to its present value using PV = CF / (1 + r)^t
Sum all present values of cash inflows and cash outflows
Subtract total present value of outflows from total present value of inflows
Use NPV = Σ [CF_t / (1 + r)^t] – Initial investment
Interpret results: NPV > 0, accept; NPV = 0, break even; NPV < 0, reject