In this video, we walk through solving a basic Net Present Value (NPV) problem, which is commonly encountered in finance exams. Jake and Sarah are considering an investment with an initial cost of $250,000 and perpetual after-tax annual cash flows of $55,250. With a discount rate of 10.28%, we use the perpetuity formula to calculate the NPV, which helps determine if the investment is worth pursuing. The video explains the concept of NPV, how to apply it to real-world scenarios, and the steps to solve such problems effectively, ensuring students can tackle similar questions on their exams.