Calculating net present value (NPV) without a discount rate is a fundamental technique used to evaluate the financial viability of investment projects. It involves assessing the present value of future cash flows without considering the time value of money.
The NPV without discount rate method is particularly useful when comparing projects with similar time frames and when the time value of money is negligible. For instance, if a company is considering two projects with an identical payback period, calculating the NPV without a discount rate can provide insights into which project generates higher absolute returns.