Learn how to use Excel to make a project selection decision based on net present value.
- [Instructor] In this video we'll examine a tool…called Net Present Value that can help us decide…which investment projects to take on.…I'm in the 02_03_Begin Excel file.…Now in this particular case, we have a project…that involves an investment in a rental property.…That rental property starts out throwing off…just under $23000 per year in cash flow.…That cash flow quickly expands because we can…increase rental prices each year.…
We figure that we'll hold that property…for as much as 60 years and then sell it when we get done.…We assume that at the end of the project's life,…the structure itself has no value but land is forever…and so we assume the land will always have value…and we'll be able to sell it…for about $7 million in 61 years.…The question becomes, is this a project that the company…should take on?…In order to evaluate that question we need…to use a tool called NPV.…
Net present value, alright now Net present value…is a tool that really tells a company…whether or not a particular project…is profitable after taking into account the risks…
- Capital budgeting in Excel
- Using Excel in project selection
- Analyzing capital structure using Excel
- Estimating weighted average cost of capital (WACC)
- Applying Excel to operational budgeting
- Cash flow budgeting
- Stress test tools for budgets
Skill Level Intermediate
Excel 2016: Power Query (Get & Transform)with Oz du Soleil1h 49m Intermediate
Excel: Analyzing and Visualizing Cash Flowswith Curt Frye1h 16m Intermediate
1. Critical Tasks in Corporate Finance
2. Project Selection in Excel
3. WACC and Capital Structure in Excel
4. Operational Budgeting in Excel
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