Investment Evaluation

What is the net present value (NPV) and how is it calculated?
Net Present Value (NPV) is a financial metric used to evaluate the profitability of an investment by comparing the present value of cash inflows and outflow...
Mon, 7 Oct, 2024 at 3:23 PM
What is the purpose of financially evaluating an idea before project approval?
The purpose of financially evaluating an idea before project approval is to ensure that the project is viable and worthwhile from an economic perspective. T...
Mon, 7 Oct, 2024 at 3:23 PM
What are perpetuity calculations?
Perpetuity calculations are used in finance to value an infinite series of cash flows. A perpetuity is a type of annuity that provides continuous cash flows...
Mon, 7 Oct, 2024 at 3:23 PM
What factors influence the financial metrics used in evaluating an idea?
Several factors influence the financial metrics used to evaluate an idea: Discount Rate: The rate used to discount future cash flows is crucial. It often ...
Mon, 7 Oct, 2024 at 3:24 PM
How is the payback period calculated?
The payback period measures the time required for an investment to recover its initial cost from the cash inflows generated by the project. It provides a si...
Mon, 7 Oct, 2024 at 3:24 PM
How can an infinite series of cash flows have a finite value?
An infinite series of cash flows can have a finite present value due to the concept of the time value of money. This principle states that a dollar received...
Mon, 7 Oct, 2024 at 3:24 PM