Net Present Value is a measure of the profitability of an investment calculated as the sum of the cash flows generated by the transaction, each discounted to reduce its importance in this sum as it becomes more remote over time. If the discount rate is chosen appropriately, the investment will be deemed profitable and therefore retained if and only if its net present value is positive.

This video will show you all the ins and outs. Listen carefully and at the end of the video, a button will appear allowing you to access the entire exercise you will have to do.

After the exercise, you will have to watch the video that gives both the solution of the exercise, a worksheet with solution and additional information needed.

You can then proceed to the viewing of Step 3 on the internal rate of return.

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