NPV and IRR Techniques for CA / CFA / CPA Exams

50+ lectures & case studies for CA IPCC / CFA / CS Final / CMA Inter / MBA Finance / B. Com Final Exams & Professionals
2.7 (3 ratings) Instead of using a simple lifetime average, Udemy calculates a
course's star rating by considering a number of different factors
such as the number of ratings, the age of ratings, and the
likelihood of fraudulent ratings.
641 students enrolled
$20
Take This Course
  • Lectures 55
  • Contents Video: 7 hours
    Other: 8 mins
  • Skill Level Beginner Level
  • Languages English
  • Includes Lifetime access
    30 day money back guarantee!
    Available on iOS and Android
    Certificate of Completion
Wishlisted Wishlist

How taking a course works

Discover

Find online courses made by experts from around the world.

Learn

Take your courses with you and learn anywhere, anytime.

Master

Learn and practice real-world skills and achieve your goals.

About This Course

Published 9/2014 English

Course Description

This course is about Tools and Techniques available for evaluating Business Investment Opportunities.

Yes! Every business takes decisions with regard to Investments in Projects. It may be starting a New Business, Expansion of Existing Business, Modernisation, Backward and Forward Integration, etc.

But, how those decisions are taken by the Business entities? What Financial factors are evaluated before taking those decisions?

This course explains all about.

There are various Capital Budgeting tools available which will evaluate Investment Opportunities and would tell us whether to take up or not to take up the projects and that process is called Capital Budgeting.

Capital budgeting is the process most companies use to authorize capital spending on long‐term projects and on other projects requiring significant investments of capital.

Capital budgeting is also concerned with the setting of criteria about which projects should receive investment funding to increase the value of the firm, and whether to finance that investment with equity or debt capital. Investments should be made on the basis of value-added to the future of the corporation.

Businesses should pursue all projects and opportunities that enhance shareholder value. However, because the amount of capital available at any given time for new projects is limited, management needs to use capital budgeting techniques to determine which projects will yield the most return over an applicable period of time.

Investment evaluation tools ranges from simple Pay Back Period, Accounting Rate of Return to cash discounting tools like NPV, IRR, MIRR, Profitability Index, etc.

The course has been structured in simple way, where in each and every techniques are explained followed by solving of case studies.

Topic covered in the course:

NPV can be described as the “difference amount" between the sums of discounted: cash inflows and cash outflows. It compares the present value of money today to the present value of money in the future, taking inflation and returns into account.

IRR:

The (IRR) is defined as the discount rate that gives a NPV of zero. It is a commonly used measure of investment efficiency.

Need for Capital Budgeting:

  1. As large sum of money is involved which influences the profitability of the firm making capital budgeting an important task.
  2. Long term investment once made can not be reversed without significance loss of invested capital. The investment becomes sunk and mistakes, rather than being readily rectified,must often be borne until the firm can be withdrawn through depreciation charges or liquidation. It influences the whole conduct of the business for the years to come.
  3. Investment decision are the base on which the profit will be earned and probably measured through the return on the capital. A proper mix of capital investment is quite important to ensure adequate rate of return on investment, calling for the need of capital budgeting.
  4. The implication of long term investment decisions are more extensive than those of short run decisions because of time factor involved, capital budgeting decisions are subject to the higher degree of risk and uncertainty than short run decision

Mandatory Disclosure regarding course contents:

The contents of this course will also be available in

a) Financial Management - A Complete Study

b) Accounting, Finance and Banking - A Comprehensive Study

courses, which are comprehensive in nature. If you have already purchased any of the above two courses, then you need purchase this course.

What are the requirements?

  • PC / Laptop / Android / iOS
  • Good Internet Connection
  • No Prior Knowledge is required

What am I going to get from this course?

  • By the end of the course, you will be able to evaluate Business Investment Proposals and take a decision.
  • By the end of the course, you will be able to appreciate various Capital Budgeting tools and techniques.

What is the target audience?

  • Entrepreneurs
  • MBA Students
  • CA / CFA / CPA / CMA Students

What you get with this course?

Not for you? No problem.
30 day money back guarantee.

Forever yours.
Lifetime access.

Learn on the go.
Desktop, iOS and Android.

Get rewarded.
Certificate of completion.

Curriculum

Section 1: Introduction to Capital Budgeting
What is Capital Budgeting
Preview
03:29
Capital Budgeting Process
01:35
Project Cash Flows
04:31
Types of Capital Investment Decisions
02:03
Principles for Measuring Project Cash Flows
02:01
Capital Budgeting Techniques
00:43
Case Study 1 on Measuring Cash Flows
02:31
Case Study 2 on Measuring Cash Flows
10:39
Section 2: Pay back Period
Introduction to Pay Back Period
Preview
02:36
Pay back period example
00:51
Payback Reciprocal
00:51
Discounted Pay Back Period Method
03:26
Case Study on Pay Back Period Method
01:19
Section 3: Accounting Rate of Return
Accounting Rate of Return
04:11
Section 4: NPV
1 NPV
Preview
10:49
2 NPV Technique
04:42
3 Advantages and Disadvantages of NPV
00:49
Case Study on NPV
04:30
Case Study on NPV Ranking
07:03
3 Case Study on NPV (Cash Flows Derivation)
05:48
Case study on NPV of Different Projects
06:00
5 Case Study on NPV and Capital Rationing
09:43
Section 5: IRR
IRR Intro
06:05
IRR Case Study with Interpolation
18:09
1 IRR
Preview
07:05
2 IRR Introduction
04:29
3 Advantages and Disadvantages of IRR
01:14
4 Modified IRR
04:28
Case study on 1 IRR
06:44
Case Study 2 IRR
05:55
Case Study 3 IRR ARR NPV and Ranking
18:10
Case Study on 4 IRR DPB PI and Ranking
13:01
Case Study on 5 PB IRR ARR NPV and Ranking
12:42
Case Study on 6 IRR Mutually Exclusive Projects and Reinvestment
08:19
Problem 7 NPV and IRR Suitability
02:03
Section 6: Profitability Index
1 Profitability Index
Preview
02:24
Case Study on Profitability Index
02:31
NPV Case Study
20:31
Equivalent Annual Cost CS
15:28
NPV Incremental Disc Rate CS
18:02
Cashflow computation
16:08
NPV Case Study on Tax Savings
08:20
NPV Case Study on Tax Savings 2
10:19
NPV CS (opportunity Cost)
14:17
Cash Flow Perspective
16:08
Abandonment Decision
04:20
Aggregate Cash Flow Method
01:18
Incremental Cash Flow Method
07:20
NPV over Different Life
14:36
Project and Equity IRR
24:59
Replacement Decision
05:21
Replacement Analysis Case Study
18:13
Replacement Analysis Case Study2
18:17
Replacement Analysis Case Study3
10:54
Bonus Lecture - Discount Coupon Links for other Courses
8 pages

Students Who Viewed This Course Also Viewed

  • Loading
  • Loading
  • Loading

Instructor Biography

I am a practicing Chartered Accountant with tonnes of passion for teaching.

I teach Financial Management & Strategic Financial Management for Chartered Accountancy, Cost and Management Accountancy and Company Secretary students in Ernakulam, India. I also hold Post Graduate Diploma in Business Administration in Finance from Symbiosis, Pune and Bachelors in Commerce, from Loyola College, Chennai.

I worked in State Bank of India as Assistant Vice President - Credit for a period of four years after which i started my Chartered Accountancy Practice. During the stint in State Bank of India, I worked on credit proposals of Mid Corporate Units and gained good experience in Financial Analysis, Risk Assessment, Viability Study, Evaluating business models, Project Finance, Working Capital Management, etc.

I conduct work shops for Entrepreneurs, Chartered Accountancy / Cost and Management Accountancy Students on the topics like Project Finance, Credit Risk Assessment, Entrepreneurship Development, Finance for Non Finance Executives, etc.

I love teaching and i want fundamentals of accounting and finance to reach students and so i am here.

Ready to start learning?
Take This Course