Capital Budgeting Part One -- Introduction and Payback Period

This is a part one of a four-part series on capital budgeting calculations and analysis. This part introduces the problem and walks through a calculation of the payback period.

Category:

Education

Tags:

• Capital
• Budgeting
• Part
• One

[gsourze]

hey Kev can you upload the workings of IRR and NPV parts? I cant complete my question! Great Vid tho!

[kevinbracker]

@gsourze Its's not letting me post the links, but you can find 2 and 3 for the TI-83/84 (and if you have a TI-BAII+ or HP10BII there are videos for cash flow worksheet that might help after you watch parts 2 and 3). Also part four is an overview/conclusion

[alz57]

yh thanks for this. i got a question, the initial investment is 4M and the years of payback consisit of 5.

Yr 1 = 2M

Yr2 = 4M

yr3 = 6M

yr 4 = 3M

yr 5 = 1M

is the pperiod 1yr,5months??? please can u help

[kevinbracker]

In this case, the Payback Period would be 1 year and 6 months (or 1.5 years). In year 1, we earn back $2m of our $4m initial investment.  This leaves $2m yet to be paid back. During year 2, we will receive $4m, so it will be 1 + $2/$4 or 1.5 years.

[angie8605]

Thank you for making this so simple!!! :) Love it!

[gracemundat]

wowwwwww its great vid, so simple yet so powerful, thanks a lot :-))))

[gsourze]

wheres part 2?

[skullripper3]

thanxx really helped>>>> awsome method short n simple



[GR530]

Thanx really helped

[vlps5122]

thank you kevin, great videos

[abcabcabcS]

why am i paying £3000 to lecturers?

[TheMrALGROUP]

THX~~~~~~~~~~~~