**Notation**

**CF**_{0
}= cash flow in time period zero (today); this is usually the cost of the project and is a negative cash flow

**CF
**_{1, 2, …n }= cash flow in period 1, 2, …n; for "normal" projects (to
be defined later), these are the positive cash flows the project is expected to produce

**NPV = Net Present Value**

**IRR = Internal Rate of Return**

**k =
required rate of return for the project; this is the firm's WACC if the project is of the same risk level as the firm's overall
level of risk **