Time Value of Money (TVM) - Periods
http://www.business-analysis-made-easy.com/NPV-Calculator.html http://www.business-analysis-made-easy.com/Calculating-Internal-Rate-Of-Return.html This Time Value of Money video show how to calculate the number of periods (months, years, etc.) when the other numbers are known Time Value of Money (TVM) - Interest Rate https://youtu.be/ms4yb3Z6C3g via YouTube https://youtu.be/7t-q4XE9OwE
0 Comments
Time Value of Money (TVM) - Refinance
http://www.loan-amortization.org http://www.loan-amortization.org/repayment-calculator.html This Time Value of Money video show how to find out how much you would save by refinancing your loan at a lower interest rate. Time Value of Money (TVM) - Periods https://youtu.be/7t-q4XE9OwE via YouTube https://youtu.be/WXY9CrromD4
Time Value of Money (TVM) - Calculate Payments
http://www.loan-amortization.org/repayment-calculator.html This Time Value of Money video show how to calculate the amount of the payment require on a loan with the other numbers known. Time Value of Money (TVM) - Refinance https://youtu.be/WXY9CrromD4 via YouTube https://youtu.be/zC4tsXkJWL8
Six Sigma Tutorial
http://www.business-analysis-made-easy.com/Six-Sigma-Tutorial.html Six Sigma Tutorial helps you know how to solve the alligator problem in your business. The name Six Sigma is taken from the concept of a normal or bell curve. When you take the standard deviation of a bell curve, it is often designated with the Greek letter &sigma. The following table shows what the probability of being outside of 1-Six Sigmas on a bell curve. Sigma Defects/Million Probability 1 700,000 70% 2 330,000 33% 3 70,000 7% 4 8000 .8% 5 300 .03% 6 3 0.0003% As you can see from this Six Sigma tutorial introduction, Six Sigma stands for the goal of 3 defects per million. That gives a probability of a defect being 0.00003%. Most people would be happy with 5 standard deviations giving a probability of .03% for a defect. It is apparent that Six Sigma is a very high standard to aim for. via YouTube https://youtu.be/_4W2nLZ-bVE
NPV Calculator
The NPV Calculator at http://www.business-analysis-made-easy.com/NPV-Calculator.html has an example set of cash flows. When you use the calculator with your own data, you can compare multiple projects and decide which one provides the greatest economic benefits. It is helpful if you understand the time value of money concept in order to fully understand this NPV calculator. It simply means that a dollar today is worth more than a dollar at any time in the future. How much less would a future cash flow be when brought back to the present? Well that depends on the discount rate. The reason for this is clear. Money in hand today can be invested with a hope of a return or to payoff debt and reduce interest payments, so it has a greater value than a potential amount in the future. A present value can be calculated for each cash flow that is expected to be received in the future. If you add them all together your result will be the net present value. At http://www.business-analysis-made-easy.com/npv-definition.html is the definition of NPV. If you have a string of cash flows that extend over a number of years, it is hard to decide what the cash flows are worth. NPV gives you a rational value for several cash flows with just one number. So we first need to decide on a discount or hurdle rate. The discount rate is the minimum rate of return that you would be willing to accept on your money. If done manually you would reverse compound each of your cash flows back to the present. If you have a cash flow of $2500 that will be received 3 years into the future and your discount rate is 7% then the present value (PV) of that cash flow would be $2500/((1.07)x(1.07)x/(1.07))=$2,040.74. So if you have a cash flow at 5 years in the future you would divide by 1.07, 5 times. Adding all the present values of the project together gives you the NPV or the Net Present Value. Also see http://www.business-analysis-made-easy.com/Calculate-NPV.html for a more in depth discussion of calculating NPV. This NPV calculator calculates net present value for up to 25 cash flows. Net present value is what a series of discounted cash flows in the future would be valued at today as calculated using a hurdle rate that represents your minimum attractive rate of return (marr). You might want to know the net present value of an income property (real estate, oil well, etc.), for example. The result would give you an estimate of the price at which the property could be bought or sold for (based on your minimum expected return - http://www.business-analysis-made-easy.com/Hurdle-Rate.html. The Net Present Value Calculator You see dual cash flows. The first column is an example. The second column is for you to enter your data. To obtain a NPV for your cash flows, enter the cash flows of your project. A decision of what discount rate to evaluate with needs to be made. The year column can be changed by just changing the first year. Play close attention to the numbers that you put into your analysis. Your decision should not be based on a “Garbage in, garbage out" result. It is important to know what net present value (NPV) is before proceeding to calculate NPV. NPV is defined as the sum of the present values of a time series of cash flows. It is a widely used method for using the time value of money to determine the value of long term projects. Used for capital budgeting, and widely throughout economics, it measures the excess or lack of cash flows in current present value terms after the discount rate has been applied. When you calculate NPV, you are summarizing the value of a cash flow over time into a single equivalent number. With the NPV calculated, you can use it to compare with other cash flow streams. This can help you determine which alternative is most economical for your organization. Net Present Value "Net Present Value is today's value for a project's lifetime of cash flows." When you have money coming in and going out over a period of time, you must take into account the time value of money. If you were to just add all the cash flows over time you would be making the assumption that the time value of money or the interest rate is zero. To determine the NPV of a set of cash flows, you must use an interest rate that defines the current time value of money. Each organization should decide what that interest rate is. It should include a base rate (probably a government set rate) and an inflation rate (current industry inflation rate). Each cash flow must be brought back to present with a reverse compounding method. When you calculate NPV, you have a single number with which to compare other projects. Choose the highest NPV projects for the largest profit. If your cash flows are costs, then choose the project with an NPV closest to zero. Watch: The Secret to Understanding the Time Value of Money https://youtu.be/zHa962SpmAU Playlist https://www.youtube.com/playlist?list=PLQdusHdlvI7QxCF6zcnG5YSD8PYmALJjV via YouTube https://youtu.be/CRYVfWqi6VE
Time Value of Money (TVM) - Interest Rate
http://www.business-analysis-made-easy.com/NPV-Calculator.html http://www.business-analysis-made-easy.com/Calculating-Internal-Rate-Of-Return.html This Time Value of Money video show how you can calculate the rate of interest on a loan when you know the other factors. http://www.business-analysis-made-easy.com/NPV-Calculator.html http://www.business-analysis-made-easy.com/Calculating-Internal-Rate-Of-Return.htm Time Value of Money Secrets https://youtu.be/OS_1zfuWM4E via YouTube https://youtu.be/ms4yb3Z6C3g
The Secret to Understanding the Time Value of Money
Learn the secret of how to understand the time value of money. http://www.business-analysis-made-easy.com/NPV-Calculator.html http://www.business-analysis-made-easy.com/Calculating-Internal-Rate-Of-Retur... Time Value of Money (TVM) - Calculate Payments https://youtu.be/zC4tsXkJWL8 via YouTube https://youtu.be/zHa962SpmAU |
ABOUT US
|