What method is most likely used by an investor to determine the worth of a project today?

Determining the worth of a project today involves assessing the current value of expected future cash flows. The present value method is utilized to estimate how much those future cash flows are worth in today's terms. This calculation accounts for the time value of money, whereby a dollar received in the future is not worth as much as a dollar received today due to its potential earning capacity.

Present value takes the future cash flows expected from the project and discounts them back to the present using a specific discount rate, which often reflects the project's required rate of return or the cost of capital. This process allows an investor to make more informed decisions about whether to proceed with a project based on its valuation in present terms.

In contrast, while net present value is a widely used method for evaluating projects, it focuses specifically on determining the profitability of a project by subtracting the initial investment from the calculated present value of future cash flows. Likewise, future value and future profit margin do not directly answer the question of determining the current worth of a project, as they reflect projections into the future rather than a present valuation.