Net present value on ba ii plus | NPV | FIN-Ed

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Net present value on ba ii plus | NPV | FIN-Ed
This video is about how to calculate the net present value or NPV using a Texas BA II Plus financial calculator. NPV is a method of ranking investment proposals that is equal to the present value of the project’s free cash flows discounted at the cost of capital.

Example:
Your division is considering two projects with the following cash flows (in millions). If the WACC is 10%, what are the projects’ NPV and which project will you accept?

Source: Fundamentals of Financial Management (Concise Edition) Brigham and Houston
Chapter 11: The Basics of Capital Budgeting
Problem: 11-6

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