Thats not quite correct IC_Deadpeople. You are referring to 10% of the insitu value.

An NPV is the present value of future cash flows from the project. For example a net cash flow in year 10 would be discounted @ 1.10^10 or in Glorieux's example $325M/(1.10^10), the cash flow in year 5 would be discounted @ 1.10^5, all assuming a 10% discount rate. You then add up the resultant yearly PV's to arrive at the NPV or year 1 PV cash flow+ year 2 PV of cash flow+ year 3 PV of cash flow ......

Hope that helps,

Quincey