37 thoughts on “Capital Budgeting Lecture in 10 min., Capital Budgeting Techniques Decisions NPV Net Present Value

  1. When the formula comes up, i actually panic and about to quit this video, then you say "don't panic" :)))))))))))))))). That really helps, thanks.

  2. Since the actual payback of the $1,000 loan isn't until 2 years, shouldn't that payment be discounted for 2 years? Your actual cash outlay in year 1 is only the interest payment, right?

  3. i. Calculate the value of the project below and what recommendation would you make relative to implementation of the project? Why?

    Venezia Manufacturing is spending RM 115,000 to update its equipment. This is necessary if the firm wishes to be competitive in the marketplace and provide a wide array of product models. The company estimates that these updates will improve its cash inflows by RM 27,500 a year for four years. The company requires a 14 percent return on the investment.

  4. Thanks for the info. Can you confirm that the method you used in valuation is the "Discounted Cash flow method"?

  5. Hello Sir..Plz listen I am.not understand about _63 dollars ans that how is it come so kindly plz solve it step by step….Thanks Sir I will wait…

  6. Use the below formula..its more easier…

    YEAR CASH FLOW NPV INT
    0 (1,000.00) (1,000.00) 5%
    1 260.00 247.62
    2 760.00 689.34
    3 – – 936.96
    Total (63.04)
    NPV (63.04)
    IRR 1.14193%

    YEAR CASH FLOW NPV INT
    0 -1000 =G6/(1+$I$6)^F6 0.05
    1 260 =G7/(1+$I$6)^F7
    2 =260+500 =G8/(1+$I$6)^F8
    3 0 =G9/(1+$I$6)^F9 =H7+H8
    Total =SUM(H6:H9)
    NPV =G6+NPV(I6,G7:G9)
    IRR =IRR(G6:G9,I6)

  7. Why do you not subtract the interest rate of 5% or 50 in dollar terms from the cashflows? When you say "it will earn 260" it sounds like you mean the project itself, not included outside factors such as financing. Just to clarify the 260 is already included the interest costs?

  8. What a mind-catching presentation as well as explanation in an organized fashion.Really like & love it!!!

  9. Best explanations! In my 3rd year in Finance and started watching your vids in 1st year, keep it up!

  10. Best explanations! In my 3rd year in Finance and started watching your vids in 1st year, keep it up!

  11. hello m sameer .i need full ou mba clases  of all subjectsonline in mbabullshitdotcom .will this workout or not .please reply

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