NPV and IRR explained

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Net Present Value and Internal Rate of Return, in short NPV and IRR. What is the purpose of the NPV and IRR methods of investment analysis, and how do you calculate NPV and IRR?

The main idea of Net Present Value is very simple: time is money! NPV is the core term in #capitalbudgeting

The net present value (or “discounted cash flow”) method takes the time value of money into account, by:
- Translating all future cash flows into today’s money
- Adding up today’s investment and the present values of all future cash flows
If the net present value of a project is positive, then it is worth pursuing, as it creates value for the company.

IRR is the discount rate at which the net present value becomes 0. In other words, you solve for IRR by setting NPV at 0.

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Philip de Vroe (The Finance Storyteller) aims to make strategy, finance and leadership enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers #financetraining in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In!
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Finally, explained in a way thats easy to understand! I suggest all PMP students to watch it!

konstancyja
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I can't thank you enough. I really can't. You explained to me 2 weeks worth of materials in less than 10. God bless you

ibsamohamed
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I can't.thank you more. I was in class and completely clueless what the lecturer was teaching. As a slower learner, you're really a blessing to us. Thank you so so so much ❤️

cliftonaurelius
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Best NPV and IRR explanation I've ever heard. Thank you

bonganimanini
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currently reviewing for my cma exam and i kind of struggling with this topic but you explained it in just 6 minutes and i can't thank you enough! you are a lifesaver!

loveelykiim
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I'm italian and I was struggling with this for a course in english, thank you this video is very easy to understand!!!

Hoshi_Poshi
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I really can't thank you enough. I wish I had a teacher like you. God bless you. Amen

alihussainkurbanhussainbhi
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Omg thank you so much!! A lecture and multiple videos later, your video finally explained it thoroughly in under 4 mins. 3 years and a pandemic later your videos still teaching!!

johannakenwood
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Excellent. The perfect video which cleared all my queries on NPV and IRR and provided a base on these concepts. Covered what is it and how to calculate it. Thanks for posting this awesome video.

vikram_sekar
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my dear friend this is one of the best ways you have explained these concepts, they don't explain this as good in universities and professional finance courses really kudos to you mate .

kaustubhnarkar
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I am loving your short and concise videos. They cover the key concepts and make them very clear!!

rauljimenez
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Man. you are a great teacher! Many folks make it hard to understand using jargons and stuff. never understood 100% but now I have nailed it. Thanks so much!

태공-yj
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Without a doubt the best explanation of npv and irr on YouTube. Thank you.

robertbotta
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thank you so much for this video, I spent 3 Hr trying to understand this on the MBA module material, but now its cristal clear after seeing this video

omarzeyad
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I wish I had access to your videos during University. This is one of the best and clear explanations of NVP and IRR. Thank you

jlee
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Just used this video for my pmp exam learning. Valueable information in just few minutes.... Thank you

konstancyja
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i will bet a $10000 if the presenter is not from arabic descent. the accent is absolutely nourishing and left your spirit.

endangeredspecies
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I don't know why, but I'm kinda addicted to the accent! lol thanks for the useful information! learned a lot!

김수연-zof
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easiest explanation I've seen. thank you! you've helped me prepare for my exam!

mooniebo
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Thank you so much, I'm writing tomorrow and I was just lost, everything is clear now. Thank you again x

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