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
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@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
4 жыл бұрын
slangnocturno shut up bitch
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
2 жыл бұрын
lol
@mazza653
Жыл бұрын
When I’m in a dick riding competition and my opponent is piageycopeland528 😫
I wish this guy was my lecturer
This is actually amazing!! i never understood it before but now its clear as glass!!!
@tutor2u-official
Жыл бұрын
You are very kind - thank you
Shout out the business students here last minute
Excellent video, important topic discussed in depth
who's here preparing for MOCK exams, mine is in a couple of minutes, wish me luck😂
@tutor2u-official
3 жыл бұрын
Good luck in your mocks!
@wonderfulfak4199
3 жыл бұрын
@@tutor2u-official thank you
@chinmayavarma5698
4 ай бұрын
I have my mock in 3hrs
@Imgonnabeunderurbedhehe
2 ай бұрын
CIE after a week 😷
great explanation and video as usual!! Ty Riley
Very clear, now understand how to calculate npv. thanks
I didn't under understand it well now i get it. Very explanatory.
I fully understand this topic now - so please I came across it.
very helpful, thank you very much
Thanks for the video really helped
You are a hero!
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??
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
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.
I really appreciate you, for being succinct. But I will need a clarification. How do I determine the discount factor?
@georgeakpoyibo9753
3 жыл бұрын
BizzerGuruSCS thnx
thanks a lot. next video?
Good luck everyone tomorrow
@max17k75
2 ай бұрын
im cooked
@tutor2u-official
2 ай бұрын
and you too
How are you not famous? Thank you 😢 so much
@tutor2u-official
8 ай бұрын
How kind - thanks!
how are the discount factors calculated?
Hello tutor 2 u. This video is really helpful but, how do I find discounting factors or calculate them?
@EthanWatters01
5 жыл бұрын
Taonga Thole I think you are given them
@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
4 жыл бұрын
given to you
how do I calculate the net present value without the discount factor?
@srikrishsanthosh6898
3 жыл бұрын
You can't.
NPV amount is for Each Year or for all years collectively?
@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
6 жыл бұрын
tutor2u Thanks there was debate between me & my friend on this issue.....he was saying it is per year
link for next video?
How you calculate 23,500
@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
How to calculate discount factor??
@yazminb2022
6 жыл бұрын
it will be given to you
@gabrielnyashanu4867
6 жыл бұрын
1/(1 + r )^t
how do u get the o.91
@srikrishsanthosh6898
3 жыл бұрын
1/(1+10/100)
@zaydgajia3478
2 жыл бұрын
@@srikrishsanthosh6898 Really appreciate this mate
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!