NPV Net Present Value in 2 Easy Steps: What is NPV

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David

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Download my FREE Cheat Sheet on NPV at bottom of all videos below

3 Minute Overview: (Calculation at bottom)

10 Min. NPV Calculation & Explanation (super easy)

Net Present Value Exam Preparation (NPV Lease vs. Buy & NPV Investment 1 vs. Investment 2) – Premium Video (Free Preview)

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Download my FREE Cheat-Sheet PDF on NPV Net Present Value click here

CLICK  HERE to get my premium videos which includes the NPV Exam Training Solution.

  • NPV is similar to Present Value, but is more like different present values “combined.” Basically, it’s today’s value of different future values.  (Huh??)
  • Imagine you’re given different values in the future… and you use the present value formula on each of those future values;  and then you combine it into just one present value.  That’s your NPV!

NPV = (Cash in or out today – if any) + (Cash in or out in Yr 1)-1 + (Cash in or out in next years)-n

  • DON’T panic! It’s much EASIER than it looks. Watch it for free right now in the videos above.

Net Present Value is normally used to determine if a project is bad or good.  If future cash flows have a NPV higher than a project’s cost, then the project is “good.”  If it’s lower, then project is “bad”. Alternatively, if the project’s cost is already included in the NPV calculation, the project is “good” if the NPV is simply positive; and the project is “bad” if the NPV is simply negative.

 

Comments

18 responses to “NPV Net Present Value in 2 Easy Steps: What is NPV”

  1. saima Avatar
    saima

    Hi i wanted to know how you came with the result of -0.94 dollars.

    Thanks

    Reply
  2. Dyl Avatar
    Dyl

    Hi, yes when I tried it I arrived at -1.30 following the formula above.

    Where would I be going wrong

    Reply
    1. David Avatar
      David

      Hi Dyl, can you show your full step by step solution?

      Reply
  3. Rithy Avatar
    Rithy

    Hi David,
    I have trying so hard to solve your NPV Exam Training Solution but I failed no matter how.
    Could you please tell me where I can find the solution for my reference?

    I really appreciate your videos. They are of great helps for a non-finance person like me.

    Reply
    1. David Avatar
      David

      Hello Rithy, the solution is one of my premium videos. Cheers!

      Reply
  4. Puja Avatar
    Puja

    hey, thanks for the help. however, i wanted to watch the video you mentioned in the 2nd clip, about NPV in exams. How would i view it?

    Reply
    1. David Avatar
      David

      Hello Puja! It’s one of the premium videos. You can register for any of the premium plans and then view it. Cheers!

      Reply
  5. Cactus Avatar
    Cactus

    Hi,

    Great website and techniques.

    Regarding the NPV answer, I get .94 PV for the $105 @ i=.06 for i year.

    The initial investment was $100. shouldn’t the answer be 100-$94.00 = NPV of -$6.00?
    A no go on this investment.

    Reply
  6. Cactus Avatar
    Cactus

    Per my earlier message, please disregard. I have come up with the -0.94 dollars.

    Thanks

    Reply
    1. David Avatar
      David

      great it worked out for ya!

      Reply
  7. Mo Avatar
    Mo

    Great videos man. Do you have an email that you can be contacted on? I have a serious question to ask you

    Reply
    1. David Avatar
      David

      Hi Mo, I guess you can just use the contact form on my advertising page.

      https://mbabullshit.com/blog/advertise/

      Note that I do not offer personal coaching for personal homeworks (get too many of those requests and if I answer one I’ll have to answer all). Cheers.

      Reply
  8. Tony Avatar
    Tony

    Thanks for the invaluable infos!

    Reply
    1. David Avatar
      David

      @Tony: You’re welcome!

      Reply
  9. danya Avatar
    danya

    i am so happy that i could find your videos before the exams … the way you explain is so simple
    but i hope to make more videos
    thank you & good luck

    Reply
    1. David Avatar
      David

      @Danya glad it helps!

      Reply
  10. SIMON OSEI Avatar
    SIMON OSEI

    In fact you made learning become very easy for me and my students.from Ghana

    Reply
    1. David Avatar
      David

      @Simon great! Hope all is well with you and your students in Ghana!

      Reply

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