🔴 NPV & Net Present Value with NPV Formula & Net Present Value Formula & NPV Calculation (Easy!)
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- Опубликовано: 25 фев 2017
- Omg I'm SHOCKED how easy.. www.MBAbull.com or / mbabullshitdotcom
(Slower original video here = • Video )
Hi guys! Here's a super dooper easy video on Net Present Value. You will be shocked, guarantee it. Alright, so if I speak too fast, you can watch my original slower video. Just open this same video on You Tube and click the link in the description in You Tube. Alright, so I'd like to start with the word Net. What do we mean by Net? Well it's usually the result of different amounts combined. So for example if you're at a restaurant. And you order food for $100. That's expensive. And the discount is $15. So you'd be paying $85 Net. The word Net means it's simply a combination of the $100 and the negative $15 combined. So this becomes net. So how do we apply that in business? Well let's say that you paid $100 today to your friend and your friend would give you back $105 one year later. So this is negative. That's why it's red and this is positive that's why it's green. It's negative because you're paying it. This is positive because you're getting it. Alright, so in this case we can say that we have a Net Value of positive $5. Why? Because positive 105, negative 100, we get $5. So does this look like a good deal to you or not? I think it does look like a good deal. Think about it. You're getting 100 bucks, you're getting back the 105. You gain 5. It seems like a good deal, doesn't it? However in this case we're only talking about the net value. It's much better to think about the net present value. So present means today. So we have to think about the value of this $105 today, because $105 next year is not worth $105 today. Why? Because we have to think about the time value of money. What does the time value of money mean? It means that money given to you today is worth more than money given to you tomorrow.
And it's worth much more than money given to you next year. Why? Because,for example, if a bank was giving a 6% interest rate… I know that's high, just an example… Then instead of giving your money, your $100 to your friend and getting back $105 next year, you could instead decide to deposit your $100 into the bank. Next year how much would that be? Would it be $105, would it be $100? No it would probably be $100 plus 6%. It would probably be $106. So that's what we mean by the time value of money. So with the net present value formula, which is different from simply net value. The net present value formula, we take into consideration the time value of money and we take into consideration how much interest you would have earned, if you put your money in the bank instead of giving your money to your friend or depositing your money in your business or whatever or investing your money in your business or whatever options you have. Okay, so now how do we create the net present value formula? Very simple. In this case step one is, boom, what is this? Why is this 105, and this one is 105 plus all this scary mumbo jumbo? Don't worry it's not scary at all. The 105 here represents the $105. The .06 here represents the 6% interest rate that you would have earned if you put your money in the bank instead of depositing it with your friend and getting back money from your friend.
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Net Present Value Explained with NPV Calculation & Net Present Value Example
Cool! Easy! And very understable!
happy you understand!
A week of confusion in my University text book, and I just correctly calculated NPV of cash flows over a 5 year period. Thank you!
Happy you're not confused now!
there are few people who have teaching knowledge with good English, Thank you.
You are welcome!
I like it when you said that the exponent is negative because you have to go 1 year backwards instead of saying that it is the inverse exponent of the divisor.
Yep just finding a way to make it sound more simple
It helps even more when you say “Boom!” I feel it takes my learning experience to a new level.. Boom!
Boom! I hope that last one helped as well
i've been trying to study this argument for almost two weeks and, after this super simple video, this is the first moment I have a clear idea of what we're talking about. THANK YOU!
Glad it's clear now after two weeks!
Thank u so much .. was feeling depressed going through the class & text but u were the beacon of hope & light 😍
Wow! Great to be a beacon of light!
Very Easy to understand and really useful, thank you : D Hope you happy and healthy
Thank you! What GREAT, simple-to-follow and generous videos. THANK YOU! I have a finance degree - but it has been a while since I've done any serious calculations - so watching your videos has re-freshed my knowledge and you have actually clarified a thing or two for me!
Glad it was helpful!
Hey, thanks for these videos, man! Really appreciated!
I appreciate your appreciation!
Awesome explanation!!! Thank you so much for this.
You're such a good Tutor. Your videos have helped me for the last three years. I'm now at University doing Accounting and Finance and still refer back to your vidoes. I wonder if you would me with questions on bond pricing, futures, forwards and options.
Thank you.
Glad to have helped you for the last 3 years! check out my other videos on bond pricing and options (click on my username or go to my website)
Thank you THANK YOU for this great channel. Really helping with the MBA blues!
Good luck in your MBA! What university? Cheers!
This channel is an essential service in 2020. God bless you!
Wow, thank you!
First presentation I actually understood and just in time for my Costs and Revenue exam next week!
good luck in your exam!
Very helpful! Much appreciated. I have shared with my class mates
thanks for the share!
you are really amazing.....explaining all this simply seems u really want us to understand it explicitly ....thanku...☺
Glad you find it amazing!
Thanks for the video and I always vote up, but I prefer using the FV/(1+r)^n because all the books use this and it's easier to keep it consistent. I still appreciate all your videos. Thanks!
Whatever suits you best
I love how simply you explain everything
Glad to explain it simply!
This just got me so ready for my midsems.Thanks
Good luck in your midsems!
love the way you explain ..and make it easy
Love the way you love my explanation!
Very helpful! Thanks!
THIS IS HELP ME A LOT, thank u mbabullshit 💕
happy to hear!
THANK YOU SO MUCH! Your video is so helpful!! You are my hero!!
You're welcome!
You have gained a subscriber. Thanks a lot! 😊
Thanks for the sub!
Very clearly presented! So much easier to understand. Cheers.
Glad you think so!
Simply thanks alot! for simplifying these topics
Happy you found it simple!
Thank you! Wonderful explanation!
You're very welcome!
welldone good explanation indeed. I have now understood it. Great work
Glad to hear that
Really nice video you have made it quite easy👍👍👍
Glad you found it easy!
Thank you sooooo much! You're a star! Why can't they explain it like that in lectures?
Coz then there'd be no place for me in this world
I am CA student it helped me lot
Good to know!
Your explanation is so thorough! Really help me a lot with my assignments! I would like to also ask what kind of formula would be appropriate if I were to make an investment yearly in bonds and stocks with a fixed return rate of 3%. (Investment varies yearly). Not taking into account for inflation. Really stuck with this problem! Would appreciate if you can help me out!
Glad it was helpful!
you are my professor ♡
Perfect Explanation Thanks
Glad it was helpful!
That's help me a lot.
glad it helped you a lot!
great tutorial.
nice thanks
Plz do video on Consolidated Financial Statements. Thks
thanks for the easy explanation but why the value 1 in the 1.06?
I Get 6.3 with 105 (1.06)^-1. DO you use PEMDAS or different way of calculation.
Perfect! 🍓
Thank you! Cheers!
Amazing!
An amazing thanks!
boom..!! Thank you soo much.. :)
boom !! You're welcome
Thank u so much u r awesome
So nice of you
Finally. I understand this. Pheeee!
Glad you understand it!
truly impressive
truly thankful for your comment
thank you
welcome
I have a small confusion in your above example is the interest rate 6% or 5% (because 100 to 105 will be 5% right)
great
Plzz upload more
The best channel! Sometimes I cannot help laughing! Not sometimes, but very often!
Don't stop laughing!
legend
Thanks!
Help! On my scientific calculator how do you put that rise to negative one number? The small number that is -1 that’s raised upwards a bit next to the formula?
Hi, all calculators are different, you'll have to look at the manual.
@@MBAbullshit Thats fine i figured the bullshit out xD thanks again for the videos
Wow♥️♥️
thanks u explanation deeply understandable
glad you understood it deeply!
It's not easy as you advertising. You could say, if NPV positive, it means it's worse to invest. And by finding NPV, we simply calculate value of your invested money after inflation in the future.
This video is OVERly clear
That's my intention!
Something that Nothing but Amazing....
Thanks!
Make more videos of finance
Marry me please, so that you gonna teach our children the mathematics 😆😆. Am kidding.
But I've understood you well rather than my professor and I hope that am gonna do it well in my tomorrow's exam.
Much of thanks from Tanzania 🙏
😅
From today, you're my Accounts god 🙏❤️🔥
Amen!
👍
from pakistan
Hello to you in Pakistan!
Legend bullshit!!! XD
Hee hee
How to calculate PVB( present value of benefits)