Final answer:
To calculate NPV, one should determine the appropriate discount rate and forecast cash flows; calculating GDP rate and finding future values are not steps in the NPV process.
Step-by-step explanation:
To use the NPV rule in evaluating investments, one should follow certain steps, of which some are:
- Determine the appropriate discount rate
- Forecast cash flows
Calculation of the Gross Domestic Product (GDP) rate is not directly related to the NPV process. Instead, predicting future cash inflows and outflows associated with the investment is crucial. Additionally, finding the future value of cash flows is not a step in the NPV process, as NPV is concerned with determining the present value of future cash flows, not their future value. To find the NPV, each expected future cash flow is discounted back to its present value using the appropriate discount rate, and these present values are then summed.