INVESTMENTS
CASH FLOW
PAYBACK PERIOD
PAYBACK PERIOD
PAYBACK PERIOD
NET PRESENT VALUE
NET PRESENT VALUE
NET PRESENT VALUE
PROFITABILITY INDEX
NPV and PI
INTERNAL RATE OF RETURN
INTERNAL RATE OF RETURN
INVESTMENT PROJECTS
185.54K
Категория: ФинансыФинансы

Investments. Cash flow

1. INVESTMENTS

Ivan Kotliarov
[email protected]

2. CASH FLOW

• Net amount of cash being transferred in
and out of a business during a given
period of time

3. PAYBACK PERIOD

• Number of years necessary for the
complete compensation of investments

4. PAYBACK PERIOD

Period
Cash Flow
0
- 1000
1
200
2
300
3
400
4
500
5
600

5. PAYBACK PERIOD

6. NET PRESENT VALUE

7. NET PRESENT VALUE

Period
Cash Flow
0
- 1000
1
200
2
300
3
400
4
500
5
600

8. NET PRESENT VALUE

• NPV > 0: invest
• NPV < 0: do not invest
• NPV = 0: what to do?

9. PROFITABILITY INDEX

10. NPV and PI

NPV > 0
PI > 1
NPV < 0
PI <1
NPV = 0
PI = 1

11. INTERNAL RATE OF RETURN

12. INTERNAL RATE OF RETURN

• Maximal cost of capital;
• Degree of risk;
• Does not require information about
discount rate (does not depend on the
value of the discount rate);
• May not exist

13. INVESTMENT PROJECTS

Standard Projects
Non-standard Projects
• Standard Cash Flows
(just one change of sign)
• Non-standard Cash
Flows (more than one
change of sign)
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