Question

600-1000 words Using your own words (do not cut and paste an example from another source)...

600-1000 words

Using your own words (do not cut and paste an example from another source) please state and explain the computational steps of a Net Present Value (NPV) calculation. What information does NPV provide a management team of a business and what kind of decision is made by management when it considers a project’s NPV?

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Net Present Value (NPV) is the difference between the present value of cash inflows and cash outflows of an investment or project proposal.

It is calculated as follows:

Net Present Value (NPV) = Present value of cash inflows - Present value of Outflows

Present value of cash inflows is computed and the outflows are deducted from it. It provides information on profitability of the project proposal. It assists the managers to take capital budgeting decisions. Net Present Value method helps the managers to decide whether to accept or reject the project. If the NPV is positive, the project can be accepted. If NPV is negative, the project is to be rejected.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Do not copy and paste answers from the web!!!! In your own words, give an example...
Do not copy and paste answers from the web!!!! In your own words, give an example of how a business would use each of the following type of business analytics: a. Descriptive Analytics b. Predictive Analytics c. Prescriptive Analytics
Give an example, USING YOUR OWN WORDS (NOT TEXT COPIED FROM THE INTERNET), of how either...
Give an example, USING YOUR OWN WORDS (NOT TEXT COPIED FROM THE INTERNET), of how either the Poisson or the Exponential distribution could be used to model something in real life (only one example is necessary). You can give an example in an area that interests you (a list of ideas is below). Give a very rough description of the sample space. If you use an idea from another source, please provide a citation in the sentence and a reference...
Which of the following best describes a project management plan? The project charter, WBS, and project...
Which of the following best describes a project management plan? The project charter, WBS, and project scope statement The schedule, management plans, and budget A formal, approved document used to control the project The project manager's plan for managing and controlling the work The engineering department wants the project objective to be a 10 percent improvement in throughput. The information technology department wants no more than 5 percent of its resources to be used on the project. Management, who is...
Discussion Question: What would you do case? (CH10) DUE 5/6 The words “Cessna Skyhawk” have special...
Discussion Question: What would you do case? (CH10) DUE 5/6 The words “Cessna Skyhawk” have special meaning for anyone who has ever wanted to learn to fly. At 27 feet long and 8 feet tall, with a 36-foot wingspan, a 140 mph cruising speed, and room for two adults and their luggage, more people have learned to fly with a Cessna Skyhawk than with any other plane in aviation history. In fact, the Cessna Skyhawk is the best-selling plane of...
Explain the complete HAZOP procedure as followed in the industry. See summary below. Explain all the...
Explain the complete HAZOP procedure as followed in the industry. See summary below. Explain all the main parts of HAZOP study in details given in the Pdf file including: 1. Overview (including definitions and usage) 2. Hazop methodology (including phases like definition, preparation, examination, documentation and follow-up). Give examples also 3. Risk review 4. Risk communication Guidance: Study the procedure carefully and then write the answers in your own words. Hazard & Operability Analysis (HAZOP) 1   Overview: Hazard and Operability...
1) Describe an example of each of the following that may be found of your kitchen:...
1) Describe an example of each of the following that may be found of your kitchen: Explain how your choice falls into this category, and if there is a chemical name or symbol for it, provide that as well. Provide a photo of your example with your ID card in it. a) a compound b) a heterogeneous mixture c) an element (symbol) Moving to the Caves… Lechuguilla Caves specifically. Check out this picture of crystals of gypsum left behind in...
Using the model proposed by Lafley and Charan, analyze how Apigee was able to drive innovation....
Using the model proposed by Lafley and Charan, analyze how Apigee was able to drive innovation. case:    W17400 APIGEE: PEOPLE MANAGEMENT PRACTICES AND THE CHALLENGE OF GROWTH Ranjeet Nambudiri, S. Ramnarayan, and Catherine Xavier wrote this case solely to provide material for class discussion. The authors do not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names and other identifying information to protect confidentiality. This publication may not be...
Please read the article and answear about questions. Determining the Value of the Business After you...
Please read the article and answear about questions. Determining the Value of the Business After you have completed a thorough and exacting investigation, you need to analyze all the infor- mation you have gathered. This is the time to consult with your business, financial, and legal advis- ers to arrive at an estimate of the value of the business. Outside advisers are impartial and are more likely to see the bad things about the business than are you. You should...
Sign In INNOVATION Deep Change: How Operational Innovation Can Transform Your Company by Michael Hammer From...
Sign In INNOVATION Deep Change: How Operational Innovation Can Transform Your Company by Michael Hammer From the April 2004 Issue Save Share 8.95 In 1991, Progressive Insurance, an automobile insurer based in Mayfield Village, Ohio, had approximately $1.3 billion in sales. By 2002, that figure had grown to $9.5 billion. What fashionable strategies did Progressive employ to achieve sevenfold growth in just over a decade? Was it positioned in a high-growth industry? Hardly. Auto insurance is a mature, 100-year-old industry...
The Business Case for Agility “The battle is not always to the strongest, nor the race...
The Business Case for Agility “The battle is not always to the strongest, nor the race to the swiftest, but that’s the way to bet ’em!”  —C. Morgan Cofer In This Chapter This chapter discusses the business case for Agility, presenting six benefits for teams and the enterprise. It also describes a financial model that shows why incremental development works. Takeaways Agility is not just about the team. There are product-management, project-management, and technical issues beyond the team’s control. Lean-Agile provides...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT