Investment Appraisal Net Present Value (NPV) | A-Level & IB Business

The basics of how to calculate present value and net present value are explained by Jim in this video.
#alevelbusiness #businessrevision #aqabusiness #edexcelbusines #businessalevel
VIDEO CHAPTERS
0:00 Introduction
0:14 What is Investment Appraisal?
0:31 Net Present Value
0:57 The Importance of Time to Investment Appraisal
1:45 The Time Value of Money
2:21 Calculating the Present Value of a Future Cash Flow
3:00 For Example
3:24 Example of Calculating NPV
3:49 Investment Project NPV

Пікірлер: 54

  • @tutor2u-official
    @tutor2u-official6 жыл бұрын

    If you find this video helpful, don't forget to like it! and SUBSCRIBE TO the tutor2u Channel to be alerted as soon as we've uploaded new topic videos like this one.

  • @trouvaillebyAamir

    @trouvaillebyAamir

    5 жыл бұрын

    Hi, which is the next video? I am not able generate a flow, this is a great video but what next? Have you discussed other methods of investment appraisal in any videos ? You could leave some links to subsequent videos in the description..

  • @libztoofly

    @libztoofly

    4 жыл бұрын

    slangnocturno shut up bitch

  • @piageycopeland528
    @piageycopeland5283 жыл бұрын

    If I pass my business degree, it will purely be because of this guy, he has taught me more than my university has and he hasn't charged me £5,000 a year!

  • @kwazyb

    @kwazyb

    2 жыл бұрын

    lol

  • @mazza653

    @mazza653

    Жыл бұрын

    When I’m in a dick riding competition and my opponent is piageycopeland528 😫

  • @jasonmasters84
    @jasonmasters846 жыл бұрын

    I wish this guy was my lecturer

  • @HostileLemons
    @HostileLemons7 жыл бұрын

    This is actually amazing!! i never understood it before but now its clear as glass!!!

  • @tutor2u-official

    @tutor2u-official

    Жыл бұрын

    You are very kind - thank you

  • @CaesarEl-Zein
    @CaesarEl-Zein2 жыл бұрын

    Shout out the business students here last minute

  • @jamieharrison9810
    @jamieharrison98108 жыл бұрын

    Excellent video, important topic discussed in depth

  • @wonderfulfak4199
    @wonderfulfak41993 жыл бұрын

    who's here preparing for MOCK exams, mine is in a couple of minutes, wish me luck😂

  • @tutor2u-official

    @tutor2u-official

    3 жыл бұрын

    Good luck in your mocks!

  • @wonderfulfak4199

    @wonderfulfak4199

    3 жыл бұрын

    @@tutor2u-official thank you

  • @chinmayavarma5698

    @chinmayavarma5698

    4 ай бұрын

    I have my mock in 3hrs

  • @Imgonnabeunderurbedhehe

    @Imgonnabeunderurbedhehe

    2 ай бұрын

    CIE after a week 😷

  • @amitzyraizy7774
    @amitzyraizy77746 жыл бұрын

    great explanation and video as usual!! Ty Riley

  • @michellestephenson3531
    @michellestephenson35318 жыл бұрын

    Very clear, now understand how to calculate npv. thanks

  • @marybumi7618
    @marybumi76184 жыл бұрын

    I didn't under understand it well now i get it. Very explanatory.

  • @janetcahill9547
    @janetcahill95478 жыл бұрын

    I fully understand this topic now - so please I came across it.

  • @zzirGrizz00l
    @zzirGrizz00l5 жыл бұрын

    very helpful, thank you very much

  • @umarshahzad5273
    @umarshahzad52735 жыл бұрын

    Thanks for the video really helped

  • @theoscingtons
    @theoscingtons6 жыл бұрын

    You are a hero!

  • @fitquipltd6788
    @fitquipltd67882 жыл бұрын

    I am confused...Shouldn't we be using Cash Flow figures for NPV rather than the profit figures...? Here it is kind of mixed together??

  • @cailaobrien7703
    @cailaobrien77033 жыл бұрын

    Thank you for the very informative video. One question, why are the discount factors 0.91, 0.83, and 0.76? How were these discount factors calculated? Thanks :)

  • @srikrishsanthosh6898

    @srikrishsanthosh6898

    3 жыл бұрын

    Think about it as reversing the compund interest formula. P/(1+r/100). Notice that, for an interest rate of 10%, you'll divide by 110 *every year*. Why reverse? Because you're trying to find out FUTURE'S values in today's terms. So you're compounding in reverse.

  • @kuffreyjones7496
    @kuffreyjones74964 жыл бұрын

    I really appreciate you, for being succinct. But I will need a clarification. How do I determine the discount factor?

  • @georgeakpoyibo9753

    @georgeakpoyibo9753

    3 жыл бұрын

    BizzerGuruSCS thnx

  • @yusrarauf7303
    @yusrarauf73037 жыл бұрын

    thanks a lot. next video?

  • @bigmanjeeb
    @bigmanjeeb2 ай бұрын

    Good luck everyone tomorrow

  • @max17k75

    @max17k75

    2 ай бұрын

    im cooked

  • @tutor2u-official

    @tutor2u-official

    2 ай бұрын

    and you too

  • @sihlemsomi6282
    @sihlemsomi62828 ай бұрын

    How are you not famous? Thank you 😢 so much

  • @tutor2u-official

    @tutor2u-official

    8 ай бұрын

    How kind - thanks!

  • @imylarsen7724
    @imylarsen7724 Жыл бұрын

    how are the discount factors calculated?

  • @thezambianpolyglot8817
    @thezambianpolyglot88175 жыл бұрын

    Hello tutor 2 u. This video is really helpful but, how do I find discounting factors or calculate them?

  • @EthanWatters01

    @EthanWatters01

    5 жыл бұрын

    Taonga Thole I think you are given them

  • @sammyvalentine3311

    @sammyvalentine3311

    5 жыл бұрын

    This may be a bit late, but you'll never be able to calculate them unless you're working backwards (which you shouldn't be asked to do). They're just estimates anyway. You'll be given the discount factors in the exam

  • @seanade69

    @seanade69

    4 жыл бұрын

    given to you

  • @seitebatsomolieleng1435
    @seitebatsomolieleng14353 жыл бұрын

    how do I calculate the net present value without the discount factor?

  • @srikrishsanthosh6898

    @srikrishsanthosh6898

    3 жыл бұрын

    You can't.

  • @simfinso858
    @simfinso8586 жыл бұрын

    NPV amount is for Each Year or for all years collectively?

  • @tutor2u-official

    @tutor2u-official

    6 жыл бұрын

    The overall return (NPV) is calculated by adding together the present values of the individual cash flows less the initial investment

  • @simfinso858

    @simfinso858

    6 жыл бұрын

    tutor2u Thanks there was debate between me & my friend on this issue.....he was saying it is per year

  • @yusrarauf7303
    @yusrarauf73037 жыл бұрын

    link for next video?

  • @aimaayub9161
    @aimaayub91613 жыл бұрын

    How you calculate 23,500

  • @itintin_40s17

    @itintin_40s17

    2 жыл бұрын

    I see your comment is 11months ago but I'll explain for anyone else looking through the comments. (minus 100,000) - £100,000 + £36400 + £41500 + £45600 = £23,500

  • @NivyNiv
    @NivyNiv6 жыл бұрын

    How to calculate discount factor??

  • @yazminb2022

    @yazminb2022

    6 жыл бұрын

    it will be given to you

  • @gabrielnyashanu4867

    @gabrielnyashanu4867

    6 жыл бұрын

    1/(1 + r )^t

  • @jonhkojoandoh4202
    @jonhkojoandoh42023 жыл бұрын

    how do u get the o.91

  • @srikrishsanthosh6898

    @srikrishsanthosh6898

    3 жыл бұрын

    1/(1+10/100)

  • @zaydgajia3478

    @zaydgajia3478

    2 жыл бұрын

    @@srikrishsanthosh6898 Really appreciate this mate

  • @Blue138UEF
    @Blue138UEF5 жыл бұрын

    is there anyone who knows how to calculate the IRR using these values? initial outlay; 15£ net cash flows 1-10; 3£ salvage value; 2£ its supposed to be rounded to 12.1% and not 12.2 or 12.0. please help!