From the course: Evaluating Business Investment Decisions
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What does it all mean?
From the course: Evaluating Business Investment Decisions
What does it all mean?
- Well, after putting in some hard yards, you've finally completed the business investment analysis for the Envention project. Now, as you may recall, Envention is a fictitious project that is seeking to turn around the fortunes of our eco-conscious retailer called ABC Enviro. Supporting this initiative is a large investment in new AI technology that's expected to drive more traffic to the company's e-commerce platform whilst at the same time helping predict patterns of customer behavior. Given that most business investment decisions rely on numbers, I'm sure you can see why the ABC Enviro board are mad keen to cast their eyes over the metrics. But before we get too carried away, let's pause to make sure that we understand exactly what the numbers are telling us. Let's go ahead and start with the net present value, usually just NPV. The NPV Is the sum of discounted future cash flows, that is, financial benefits less…
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