The normal investment is understood to mean an investment that only includes an investment payment at the beginning. Afterwards, only repayments are made.
Definition / explanation
The payment of the investment amount takes place only once with the normal investment or takes place over a fixed period of time. All subsequent periods only include the repayments.
The cash flow only changes direction once (mathematically speaking, only the sign). In comparison, in the case of non-normal investments, the cash flow changes direction several times.
It can happen that a normal investment also requires only one single payment at the beginning. This means that further future payouts are excluded.
The special thing about a normal investment is its clear internal rate of return.