Let's talk about NPV. NPV is just a net present value of something. It's when you say that stream of payments. I'm going to get in the future. What is that worth today. So a common example of this is you're joining a startup company.

And you're getting stock options and the founder says well this company is going to be worth a billion dollars and I'm giving you.

0.1% of the company. Therefore you're getting a million dollars worth of stock. What he's or she's arguing is what's going to be worth in the future. You have to discount that back to today. You have to figure out what is that worth today.

And you have to apply a discount rate or an interest rate that takes into account the massive risk that startups face. What you end up with is the price that is worth today. And that's the price at which a venture capitalist would invest in the company today.

So if that founder just raised around at 10 million dollars and that company's only worth 1% of what the founders are you. Your million dollar package is actually worth $10,000.

So NPV calculations at a very rough level you should be very comfortable doing in your head.