Net Present Value (NPV) explained

Please, a little dump question, is the 1.2 for the first sample questions a constant number?

I legit almost cried when I did the calc on a project and came up with the right answer after watching this! THANK YOU!!!!

Excellent example for those who haven't get financial math training.

Liked n subscribed, wherever u go, we shall follow 🫡

How do u get the 1.2?

Is the WACC the discounted factor?

This is the only clear explanation of PV on the internet! Thank you

Fantastic video

Can't this example be simplified ? When I invest 1000 $ at 20 % return , i would get X amount in 4 years.

If X is smaller than the sum of yearly returns ( 400 X 4 ) , then the investment is good.

Am I over simplifying it ?

why 1.2?

Hello! I have a more complex question. In theory, if markets are efficient, the net present value of investing in any stock (no matter what is the risk of the stock/ rate of return/ discount rate) should be equal to zero. That means if markets are efficient, investing to stocks leaves no profit? It doesn't make sense in my head. Can you please explain it to me? Let's say I invest 100$ and I make 20$ in one year. I actually made 20$ profit cash. How is the NPV=0?

Why does 100 x 1.25 = 125
but
100 / 1.25 = 80???

nice video my g, helped me out a lot thanks.

This 5 minute video has solved two years of headaches. Thank you!!

In exam project A and project b. They have given from project 0 , i have calculated from project o and it is for 12 mark , will they give o marks for that plz reply.

Is something wrong with that? If I deposit $1,000 with 20% interest rate I would have 2073 after 4 years. This investment will give me only 1600 after 4 years. So why is it worth?

Hello, thanks for your great videos.

I have again a question about calculating the NPV of the cash flows for a project company (SPV), which is founded for example to operate a PV plant for 20 years.

Here I have at the beginning a defined ratio of debt and equity (eg 70% to 30%). This allows me to calculate the WACC and then use it for discounting. But is this suitable at all? Because after each year the financing mix of my project company changes; I pay off my debts, I distribute profits and my equity changes as well. How would you calculate the NPV of the project company?

Great breakdown I had to watch a few videos to find the best one! Thank you!!!

Clear, concise, succinct and intuitive. Thanks a ton for the video. Liked & subscribed.

It was an excellent explanation 🙏