And takes into consideration estimated future rate of...

And takes into consideration estimated future rate of inflation. From Wikepdia:

'In finance, the net present value (NPV) or net present worth (NPW)^[1] is the summation of the present (now) value of a series of present and future cash flows. Because NPV accounts for the time value of money NPV provides a method for evaluating and comparing products with cash flows spread over many years, as in loans, investments, payouts from insurance contracts plus many other applications.'

It was used in times of high inflation to inflate the value of projects.