Lecture 1: Introduction to NPV

Business & Economics - Lecture 1: Introduction to NPV - 13 slides

Explore Lecture 1: Introduction to NPV, covering This lecture introduces the concept of Net Present Value (NPV) and its significance in finance, focusing on the time.

Topics Covered

  • Introduction to Net Present Value (NPV)
  • The Time Value of Money (TVM): Understanding the Premise
  • Discounting Future Cash Flows: The Core Technique
  • NPV Formula: Core Components Explained
  • Choosing the Discount Rate: Factors and Approaches
  • Understanding NPV Outcomes: Interpretation and Relevance
  • Key Assumptions Underlying NPV Calculations
  • Comparison of NPV with Other Financial Metrics
  • Real-World Applications of NPV Analysis
  • Advanced Concepts in NPV: Sensitivity Analysis
  • NPV Applications in Capital Rationing
  • Limitations and Critiques of NPV
  • Conclusion: Mastering NPV for Strategic Decisions

References

  • Fisher, I. (1930) The Theory of Interest. New York: Macmillan.
  • Ross, S., Westerfield, R. and Jordan, B. (2019) Fundamentals of Corporate Finance. 13th edn. New York: McGraw-Hill.
  • Brealey, R., Myers, S. and Allen, F. (2020) Principles of Corporate Finance. 13th edn. New York: McGraw-Hill.
  • Brealey, R.A., Myers, S.C., & Allen, F. (2020) Principles of Corporate Finance. 13th edn. McGraw-Hill.
  • Ross, S.A., Westerfield, R.W., & Jaffe, J. (2021). Corporate Finance. 12th edn. ResearchGate.
  • Damodaran, A. (2012) Investment Valuation. 3rd edn. Hoboken: Wiley.
  • Brealey, R.A., Myers, S.C., and Allen, F. (2020). Principles of Corporate Finance, 13th Edition. McGraw-Hill.
  • Damodaran, A. (2012) Investment Valuation: Tools and Techniques for Determining the Value of Any Asset. Wiley.
  • Berk, J., DeMarzo, P., and Harford, J. (2020). Fundamentals of Corporate Finance. Pearson.
  • Damodaran, A. (1999) Corporate Finance: Theory and Practice. Wiley.
  • Brigham, E.F. and Ehrhardt, M.C. (2019) Financial Management: Theory & Practice. Cengage Learning.
  • Trigeorgis, L. (1996) Real Options: Managerial Flexibility and Strategy in Resource Allocation. MIT Press.
  • Brealey, R.A., Myers, S.C., and Allen, F. (2020) Principles of Corporate Finance. McGraw-Hill Education.
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