If Calculate Net Present Value of Cash Flows is checked in the "Output Definition" portion of the Cash Flow dialog, GoldSim adds an output called NPV. This is a scalar value with dimensions of currency.
The net present value calculation (NPV) recognizes the time value of money, and discounts future cashflows (both expenses and revenues) based on a specified discount rate. Hence, an expense incurred 5 years in the future has a present value that is less than the same expense incurred today. Likewise, a revenue generated 5 years in the future is worth less than the same revenue incurred today.
If the Calculate Net Present Value of Cash Flows is checked, the Annual Discount Rate field is activated. The Annual Discount Rate can be entered as a fraction or a percentage (with the % symbol).
The net present value of an expense or revenue generated at some time t into the future is a function of the Compounding Method (Continuous or Annual). The default is Annual.
Generally, the discount rate will be entered as a constant (with riskier projects being assigned a higher discount rate). However, you can also specify the discount rate to be time variable. In this case, GoldSim treats it as a "zero coupon rate", such that the future cash flows are discounted using the value of the discount rate at the time the cash flow is incurred.