Division (a) Evaluation of financial profitability of the investment and national capital

Financial Net Present Value (FNPV) is the sum that results when the expected investment and operating and replacement costs of the project (discounted) are deducted from the discounted value of the expected revenues.

Financial Rate of Return (FRR) is the discount rate that produces a zero FNPV.

The financial profitability of an investment is assessed by estimating the financial net present value and the financial rate of return of the investment (FNPV(C) and FRR(C)). These indicators compare investment costs to net revenues and measure the extent to which the project's net revenues are able to repay the investment, regardless of the sources of financing. In some cases (in the context of State Aid and private operators) the calculation of FRR(Kp) is required. Interest payments shall not be included in the calculation FNPV(C).