A more simple example of the net present value of incoming cash flow over a set period of time, would be winning a Powerball lottery of $500 million. If one does not select the "CASH" option they will be paid $25,000,000 per year for 20 years, a total of $500,000,000, however, if one does select the "CASH" option, they will receive a one-time lump sum payment of approximately $285 million, the NPV of $500,000,000 paid over time. See "other factors" above that could affect the payment amount. Both scenarios are before taxes.