Are you taking a course in finance? Learn how to calculate #NPV in this lesson: buff.ly/1qEs1H6 #AlanisBusiness #finance

what an outstanding explanation in simple terms. For someone starting afresh in FM, this is simply remarkable. The rationale quoted clarified all my questions. Extremely grateful to you for your explanation

What my CPA level teacher couldn't teach in 1.5 hours was learned in 16 minutes. Amazing. Thank you. This helped me so much :)

Interested in making your own tutorial videos like this one? Learn how with my new course titled: How to Create Quality Tutorial Videos. It's available now, and because you all have been so supportive of Alanis Business Academy I've temporarily discounted it from its normal price of $49. For a limited time you can pay whatever price you feel is fair and get access to a great course.Simply select the following link, scroll down to "Buy Now", and enter the pay you want to pay at checkout. www.alanisbusinessacademy.com/tutorialvideoguide/ Thanks again for all your support.

I am a public health major taking an economics class. Thanks a bunch! Great clarity.

I seriously enjoyed your presentation. My homework assignment is due in 2 days and I was lost. Your presentation was right on the spot. Thank you.

That's awesome Ram! I'm glad you got all of your questions answered. Best of luck to you!

It depends upon your situation. If you only wanted to estimate the impact of inflation on your future cash flows then you would use the inflation rate. However for capital budgeting projects the discount rate must account for the time value of money and what you give up as a result of not having the money now. Meaning if you had the money in your possession what would you likely earn on it? You can also add in the inflation rate to account for diminished purchasing power as well.

Glad you liked the video! I do have several other videos on capital budgeting if you're interested. Hope to hear from you again soon.

I was struggling with this formula until watching this video. Simplified presentation. I have never been great at math but this was simple to learn due to the way it was presented.

@Alanisbusinessacademy

9 жыл бұрын

Chris Hawkins Glad I could help you Chris! Good luck with the rest of your class.

You're welcome. Glad you found the video useful.

This video was awesome. I'm taking an online Healthcare Finance class. I was so lost in how to calculate NPV. You put it in terms that were so simple. This video help me to answer my discussion question for the week.

@Alanisbusinessacademy

9 жыл бұрын

Trish McElveen Very glad I could help. Good luck with your healthcare finance course.

man!! best class ever!! damn,, i wish my classes were just as clear, lucid, and good as this one. thank you Sir!! ill come back with a lot of questions. that's it

Thank you so much for this explanation. This was so much more understandable than my textbook.

Excellent! For someone who has no background whatsoever and switching to Finance, this was very helpful. Thank you for the detailed and simple explanation.

@Alanisbusinessacademy

10 жыл бұрын

Glad to hear it was helpful. Best of luck to you.

Thanks so much for posting this. I do not have a finance/economic background and this helped a lot for my uni project!!

Thanks Peter! New videos come out Monday's at 8:00 a.m. P.S.T. I have no plan on discontinuing that at this time.

Glad you got it figured out Sarah.

This is such a lifesaver. Thank you so much for making this clear. Your videos really helped me a lot improve my work in Business Development.

@Alanisbusinessacademy

7 жыл бұрын

Glad I could help!

Just learned everything I needed for my final tomorrow through your youtube channel -- THANK YOU

@Alanisbusinessacademy

9 жыл бұрын

Alexandra Cano Glad I could help Alexandra! I'm sure you did great on your final. Thanks for watching!

Very good, easily understandable explanation.

@Alanisbusinessacademy

3 жыл бұрын

Glad it was helpful!

This really really helped me on my finance class. Excellent video Alanis,Excellent.

Excellent quick tutorial. Thank you very much.

Thank you for this. You are saving me from so much stress. I am beyond grateful.

Yayy you helped me do my homework and I have a Finance Quiz tomorrow. Thanks man!

@Alanisbusinessacademy

9 жыл бұрын

Rachael Hargrove Glad I could help. How did your finance quiz go?

OMG that was better and cleared than in grad class... THANK YOU!!!! : )

@Alanisbusinessacademy

8 жыл бұрын

Glad I could help!

Apparently your videos are good enough our teacher linked to it to view, nice job ABA!

@Alanisbusinessacademy

9 жыл бұрын

Andrew Sychra That's great! What institution are you enrolled?

@JLproductionsLLC

9 жыл бұрын

For a friend of mine, Trident.edu Trident University.

@Alanisbusinessacademy

9 жыл бұрын

Andrew Sychra Awesome! Best of luck with your studies.

thanks I have an exam tomorrow and this really helped :)

@Alanisbusinessacademy

9 жыл бұрын

Emm Tee You're welcome. I hope your exam went well.

such a nice explanation...my exms are in a week..u made it easier ..Tysm for this video ..

Brilliant, a big dig out on my project management assignment for college. Thanks a million..

@Alanisbusinessacademy

10 жыл бұрын

You're welcome Paul! Glad I could help.

It's also common for firms to use a cost of capital, which the return that would be needed on the project to make it worthwhile. Assuming NPV is greater than zero and the cost of capital is calculated accurately, this would be an acceptable project. Hope this helps Arijit.

Thank you for this awesome break down!

You're welcome Samuel! Be sure to checkout my new video on calculating IRR if you're interested.

Well thank you! Glad I could help.

thank you thank you thank you for sharing this lecture. read textbook and notes and I can't understand any until I saw your lecture. : )

@Alanisbusinessacademy

10 жыл бұрын

I'm glad to heard this video helped you. If you're looking for additional resource sin the area of finance be sure to look into our "Capital Budgeting 101" playlist. Thanks for watching.

Thanks for this video, it explains clearly what I am studying in economics.

@Alanisbusinessacademy

8 жыл бұрын

Glad I could help! Thanks for watching.

your videos are so informative very easy to follow

Thanks for your help buddy!

You make stuff simple and interesting... Thank -you

@Alanisbusinessacademy

9 жыл бұрын

andre I'm glad you think so!

Hi Shana, Most likely that project is related to some type of capital budgeting project so you would want to assess to total cash flow per year. For example, if cash inflows during year 1 represent $5,000, but a cash outflow of ($3,000) also is projected due to equipment maintenance you would discount $2,000 in total cash flow for year 1. Hope this clarifies for you . Good luck!

This video simplified everything for me. Thanks a lot

This was a LIFESAVER!!! I am so appreciative! THANK YOU!

@Alanisbusinessacademy

9 жыл бұрын

Tracy Person You're welcome Tracy! Thanks for watching and please share with your friends.

Fucking hell finally someone explaining well

Excellent instructor and excellent instructions rendered!

@Alanisbusinessacademy

8 жыл бұрын

Thank you sir!

@berniegraysr.4636

8 жыл бұрын

You are welcome.

Saved my day! Thanks a lot! Well explained!

@Alanisbusinessacademy

7 жыл бұрын

Thanks! Glad I could help you.

Thanks Subin! I'll try to incorporate some more financial management concepts later in the year. Until then, check out my playlist title Capital Budgeting 101 for lectures on some other capital budgeting techniques.

Aaarrrggghhh The way you explain it makes way more sense. thanks very much. I get it now!!!

It refreshed my mind with NPV. Thanks for sharing

Thank you Matt. It was awesome.

Thanks you thank you!

@Alanisbusinessacademy

10 жыл бұрын

Techinsane011 You're most welcome!

Thanks this is very helpful. :) Do we need to add a minus symbol in front of number of period? I have seen it many NPV examples.

Thank you so much. It was very helpful.

Thank youfor the video. Hope you would come up with more financial management lectures soon.

this was helpful thank you very much

@Alanisbusinessacademy

2 жыл бұрын

Hey thanks! You’re very welcome.

Hi, I found this video well explained and helpful! But I do want to know if there's a way to calculate this with the financial calculator. Do you have a video for that or could you tell me how to plug in the numbers in order to get the present value? Thanks! Would appreciate your help!

Great video!!!! Hope you keep them going!!

Thank you, very clear and easy!

@Alanisbusinessacademy

10 жыл бұрын

That's great to hear. Thanks for taking the time to comment.

Very nicely explained

How did you calculated (1+0,5) 3 ( in the third year.) the result is 2,5. I don't understand the 1,1576250 and the same for the first year.

Great explanation! Thanks! :)

@Alanisbusinessacademy

9 жыл бұрын

marinennovi You're very welcome! Thank you for watching and taking the time to comment.

Thank you very much excellent explanation!

@Alanisbusinessacademy

10 жыл бұрын

You're welcome Rajan! Glad I could help.

Thank you. very helpful

Your lecture is very easy to understand. Thanks for it. Could you help with the formula when the cash flows are even?

What my professor failed to teach in 9 months you have taught me in 16 minute's. You Sir deserve a cookie!

@Alanisbusinessacademy

9 жыл бұрын

besi hoda That's too bad, but glad it finally made sense. I will most certainly take that cookie! Thanks.

@xXdoblodigitalXx

9 жыл бұрын

***** I have to say, the reason is that unlike my professor, you are very easy to understand and generally made it look easy. You have gained a new subscriber and I hope more people will discover this your channel!

@Alanisbusinessacademy

9 жыл бұрын

besi hoda I really appreciate that Besi! Thanks for subscribing!

Thanks for help on a difficult concept for me!

great.. thank for the class

@Alanisbusinessacademy

9 жыл бұрын

Manju Seneviratne You're welcome! Thanks for watching.

Thanks,that was useful)

Thank you ... thank you .... thank you ... you helped me alot 💜💜💜

as I listen this video, I totally understand so easy

@Alanisbusinessacademy

9 жыл бұрын

황인규 That' the goal! Glad it worked out.

Great video. I need to decide weather to hold a rental property or sell (flip) it. Someone suggested I use NPV to evaluate my decision. After watching this video I understand why he suggested that.

@Alanisbusinessacademy

10 жыл бұрын

NPV is a great tool for making those types of decisions. Best of luck to you!

Very nicely explained. Would be nice if you can add few variety of examples on capital budgeting techniques.

Dude, you rock! .. I'm subscribing.

@Alanisbusinessacademy

10 жыл бұрын

Glad to hear that. You rock!

Hi, i have a question : If we have a Expected disposal/residual value, do we to add it to get the NPV?

Very well explained. Thank you! I have a question. How can I do the NPV when for example I want to acquire a new appartment and rent it for tourists. I would need first the money from the bank who will charge me an interest per year. Does the cashflow is the rent that the tourists would pay me per year (lets say 100) minus the bank mortgage that I need to pay (lets say 40)? This would mean that the yearly cash flow is 60 per year and from this 60 per year I need to do the NPV?

outstanding thankyou!!!

@Alanisbusinessacademy

9 жыл бұрын

Kristopher Palmer You are most welcome.

Is the 3rd year discounting fig correct here in this vid?

What tools are u using in this tutorial to write things on digital board?

Thanks for sharing, I learned a lot from your video.

thank you,,, it is so helpful..

Does NPV only take in account for cash inflow? I have a problem that includes a table that has inflows and outflows listed for four years.

Thank you very much.

how do you do it on the calculator? solves for PV for each cashflow each year?

Yup agree with comments here explained easier than my lecture thanks buddy :-)

but i have a question that , in lots of questions amount of cash inflow for each year is same, so they multiply that each year amount with a value which is a small value in points , above that value its written (percentage)% factor, instead of calculating each year PV, i try every method but i couldnt derive that vale, so i have to calculate each year pv separately.. please help

Glad I could help Raul! If you need help with any of the other capital budgeting techniques check out the playlist "Capital Budgeting 101". Take care.

it was very important material difficult to own it & i want to appriciated for that.....Thank you

Thank you so much

Thank you - i was struggling to understand my homework.

Enriching video !

You resemble Captain Americas Voice so much I couldnt concentrate listening!😂😂😂

How do you calculate PVGO ( present value of growth opportunites) based on fluctuated investment in the first 2 years and a fixed cash flow after that?

Your explanations and solutions makes it easy for me to understand the concept of NPV. But i got a little confuse where cash inflows were consistent say in the first two years and from the 3 year onward, they were consistent. Does this mean i have to use both formulas for such a problem?

@Alanisbusinessacademy

10 жыл бұрын

As long as you discount each years cash inflows separately (regardless if they're consistent) you will be fine. Most of the time where students go wrong is they add all cash inflows together and then discount them, which of course assumes that they will all be received at the same time. You can also use a financial calculator for this to help speed things up a bit.

well articulated

@Alanisbusinessacademy

9 жыл бұрын

Oozewell Matutu Thanks! Glad you think so.

Thanks! I needed to understand calculating the (1+i) to the power and my textbook wasnt giving me that. Now i understand what the heck is going on.

THANK YOU!

This was really helpful. How would you calculate the NPV if interest rates are different for all the years?

where can i get the calculator you mentioned in the video ?

Very straightforward and easy-to-understand video, well done. Question: are there any standards or methods on assessing the correct interest rate to use? I usually use the OECD rates for comparable businesses to assess our future investments but I'd like to know what other people are doing ... where would you check your rate? What's your advice? Thanks!

@Alanisbusinessacademy

10 жыл бұрын

Thank you Ricca! It's common for companies to use a weighted average cost of capital (WACC), which is essentially the cost for the company to borrow money, as the discount rate when evaluating various expenditures. This allows the company to determine at minimum if the expenditure will at least cover borrowing costs and provides some basis of comparison between multiple projects. Great question. Hope this helps to clarify a bit.

This video is a explained better than my accounting lecture. But I'm having issues on how to discount those number to the 0.5 interest rate. I don't know how to calculate that for the calculator. Can some please help.

If you had an initial investment as well as costs each year, then how would this factor into the NPV calculation?