How to Calculate NPV and IRR in Excel

Ryan O'Connell, CFA, FRM shows how to calculate NPV and IRR in Excel.
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Chapters:
0:00 - Define the Expected Cash Flows
0:51 - Calculate the Present Value (PV) of Each cash Flow
1:46 - Calculate the Net Present Value (NPV) of the Project
2:14 - Calculate Net Present Value (NPV) using NPV() Excel Function
2:38 - Calculate Internal Rate of Return (IRR) Using IRR() Excel Function
2:54 - NPV and IRR Accept or Reject Rule
3:27 - Experimenting With Different Assumptions
*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC

Пікірлер: 31

  • @RyanOConnellCFA
    @RyanOConnellCFA Жыл бұрын

    💾 Download Free Excel File: ► Grab the file from this video here: ryanoconnellfinance.com/product/financial-analysis-excel-file-for-npv-and-irr-calculations/ 🎓 Tutor With Me: 1-On-1 Video Call Sessions Available ► Join me for personalized finance tutoring tailored to your goals: ryanoconnellfinance.com/finance-tutoring/

  • @andrewnguyen7778
    @andrewnguyen77787 ай бұрын

    I just learned more in four minutes and twenty seven seconds than my finance professor. Test is tomorrow, thanks!

  • @RyanOConnellCFA

    @RyanOConnellCFA

    7 ай бұрын

    Awesome, good luck on the test Andrew!

  • @veggieeater
    @veggieeater5 ай бұрын

    This was better than the textbook's explanation, and it helped me pass this week's assignment. You are truly appreciated!

  • @RyanOConnellCFA

    @RyanOConnellCFA

    5 ай бұрын

    Much appreciated and thank you for the nice feedback! I'm glad it helped

  • @karibear5
    @karibear54 ай бұрын

    Very straightforward and informative. Thank you for such a great video!

  • @alex_2293
    @alex_22932 жыл бұрын

    Very useful and simple as always thank you for the video. The if function makes everything look much more professional, i forgot about it.

  • @RyanOConnellCFA

    @RyanOConnellCFA

    2 жыл бұрын

    Really appreciate the feedback Alex!

  • @ranjeet090
    @ranjeet0905 ай бұрын

    I had lots of classes of PMBOK but didn't understand anything. Your video of only 2 mins helps me understand the concept such a way that I could even teach others 😂

  • @RyanOConnellCFA

    @RyanOConnellCFA

    5 ай бұрын

    That is amazing feedback, thank you for that!

  • @williama.rivera9414
    @williama.rivera94142 жыл бұрын

    Very comprehensive and instructive as ever. Many thanks for share it.

  • @RyanOConnellCFA

    @RyanOConnellCFA

    2 жыл бұрын

    My pleasure William, and thank you for the feedback!

  • @jasonjunior1308
    @jasonjunior1308 Жыл бұрын

    Thanks a lot! It made my assignment a lot easier. ✌

  • @RyanOConnellCFA

    @RyanOConnellCFA

    Жыл бұрын

    Glad to hear that!

  • @falmikeb
    @falmikeb4 ай бұрын

    Thanks alot 😍😍

  • @TheKassidy01
    @TheKassidy0129 күн бұрын

    What is the interest rate used? Is it for the current market within a country?

  • @RyanOConnellCFA

    @RyanOConnellCFA

    16 күн бұрын

    Hello, the interest rate used would be specific to the project itself. It is the return that investors demand for this project based on the risks

  • @sarastanley8103
    @sarastanley81034 ай бұрын

    Is there any chance you can make an incremental IRR video?

  • @marwinb.delacruz6936
    @marwinb.delacruz69362 ай бұрын

    When you say cash flow, as presented in your excel, is it the same with net cash flow?

  • @mikeyhernandez9895
    @mikeyhernandez98954 ай бұрын

    Didnt work for my assignment

  • @jariusaliffwan8001
    @jariusaliffwan800110 ай бұрын

    What if there are both cash inflows and outflows for years 1, 2, 3, 4 as well? Using your example The cash flow for year 1 is 100, year 2 is 200, year 3 is 200, year 4 is 150. What if from years 1-4, there’s an outflow of $50? Do we take it as Year 1: 100-50 Year 2: 200-50 Year 3: 200-50 Year 4: 150-50 And use the same excel formula of IRR()?

  • @RyanOConnellCFA

    @RyanOConnellCFA

    10 ай бұрын

    That is exactly correct. If we make the assumption that the inflows and outflows happen on the same day then we would calculate it exactly as you have described

  • @jariusaliffwan8001

    @jariusaliffwan8001

    10 ай бұрын

    @@RyanOConnellCFAThank you so much for the quick and literally life saving response!! You really helped me out good! Thank you!!

  • @RyanOConnellCFA

    @RyanOConnellCFA

    10 ай бұрын

    @@jariusaliffwan8001 Haha it is my pleasure, glad I could be of service!

  • @HelloThere-lo3qi
    @HelloThere-lo3qiАй бұрын

    Is CF the same as ending cash balance?

  • @RyanOConnellCFA

    @RyanOConnellCFA

    Ай бұрын

    It is not exactly the same! CF stands for Cash Flow. It is the amount of money being paid or received at that exact time. Cash balance would be the amount of cash sitting on a companies balance sheet. A company could have cash sitting in its cash balance now that it received from a cash flow 10 years ago

  • @HelloThere-lo3qi

    @HelloThere-lo3qi

    Ай бұрын

    @@RyanOConnellCFA so is it possible to have ending balance a plus and your cash flow is a minus in year 0 (lets say its because year 0 firm need to spend for initial investment) i was so confused because its different XD

  • @TheKassidy01
    @TheKassidy0129 күн бұрын

    F4 isnt locking the interset rate

  • @RyanOConnellCFA

    @RyanOConnellCFA

    16 күн бұрын

    You may have an FN key somewhere else on your keyboard that you need to hold while you press it

  • @TheKassidy01
    @TheKassidy0129 күн бұрын

    Its not pasting formula's??

  • @RyanOConnellCFA

    @RyanOConnellCFA

    16 күн бұрын

    Try right clicking instead of using keyboard shortcuts