Net Present Value (NPV) Explained: When to Accept or Reject Investments

Описание: 📓 Interactive Notebook: https://ludium.ai/courses/finance-the...

Is that investment really worth it? Learn how Net Present Value (NPV) reveals whether a project creates or destroys value—and why simple arithmetic can mislead you when time and interest rates enter the equation.

In this video, we break down the NPV formula, walk through a real energy efficiency investment example, and show how the same project can flip from "accept" to "reject" when interest rates change.

📚 Key concepts covered:
• Why a dollar today is worth more than a dollar tomorrow
• The NPV formula and what each component means
• The decision rule: positive NPV = accept, negative NPV = reject
• How discount rates come from the market, not intuition
• Step-by-step NPV calculation at 4% vs 10% interest rates
• Why higher interest rates make future cash flows worth less

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📖 ORIGINAL SOURCE
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This video distills concepts from a longer lecture.
Watch the full original:    • Ses 3: Present Value Relations II  

All credit for the original content belongs to the source creator. This video aims to make these valuable concepts more accessible through condensed presentation.

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📺 About Lecture Distilled
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Long lectures. Short videos. Core insights.

We distill lengthy academic lectures into focused concept videos, preserving the essential knowledge while respecting your time.

🔗 GitHub: https://github.com/Augustinus12835/au...

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