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Finance & Accounting Accounting & Bookkeeping Capital Budgeting

Time Value of Money & Capital Budgeting - Present Value

Present value and future value calculations applied to larger dollar amount decisions comparing use of Excel, tables...
Highest Rated
Rating: 4.5 out of 54.5 (120 ratings)
32,312 students
Created by Robert (Bob) Steele
Last updated 5/2019
English
English [Auto]
30-Day Money-Back Guarantee

What you'll learn

  • Core managerial accounting concepts and objectives
  • Time value of money
  • Present value of a single amount and annuity
  • Future value of a single amount and annuity
  • Capital budgeting including decision making techniques for decision with large dollar amount that affect multiple time periods.
  • How to calculate and apply the payback period to capital budgeting decisions
  • How to apply the accounting rate of return calculation to capital budgeting decisions
  • How to use net present value (NPV) calculations to make long term decisions considering time value of money
  • How to use internal rate of return (IRR) calculations to make long term decisions considering time value of money
  • How to use internal break-even time calculations to make long term decisions considering time value of money

Requirements

  • Understanding of basic accounting terms

Description

Time value of money and capital budgeting decision is an excellent course for anybody who needs to consider longer-term decisions that require us to understand the time value of money. We will learn the time value of money concepts like present value and future value using multiple methods, including formulas, tables, and Excel functions. We will format the data in many ways and have many examples using Excel to calculate present value.

The course will review core managerial accounting concepts and objectives so that we get into a managerial accounting mindset as opposed to a financial accounting mindset.

We will describe, calculate, and apply the time value of money concepts. Time value of money is a core concept useful to both business and personal decisions and capital budgeting decisions, decisions of larger dollar amounts that affect multiple periods, provide great tools and scenarios for learning the time value of money concept.

The course will explain the present value of a single amount and present value of an annuity, describing multiple ways they can be calculated including formulas, tables, and Excel functions.

We will discuss the future value of a single amount and future value of an annuity, explaining multiple ways they can be calculated including formulas, tables, and Excel functions.

The course will apply time value of money and other decision-making tools to capital budgeting decisions. Capital budgeting decisions are generally larger dollar amount decisions that affect multiple periods into the future and therefore, often require us to consider the time value of money. We will run multiple scenarios of capital budgeting decisions what are great tools to learn the concept of the time value of money.

We will cover how to calculate and apply the payback period to capital budgeting decisions, the payback period being the time period at which or initial investment will be returned.

The course will discuss how to apply the accounting rate of return calculation to capital budgeting decisions.

We will describe how to use net present value (NPV) calculations to make long term decisions considering the time value of money. The net present value calculation is the primary tool we use that does take into consideration the time value of money with regards to capital budgeting decision making, and therefore we will have many examples of the NPV calculation.

The course will explain how to use the internal rate of return (IRR) calculations to make long term decisions considering the time value of money. The internal rate of return is another core concept related to capital budgeting decisions and is related to the NPV. We will compare the IRR and the NPV in detail.

We will analyze how to use internal break-even time (BET) calculations to make long term decisions considering the time value of money.

Who this course is for:

  • Accounting students
  • Business owners & professionals
  • Anyone who whats to learn accounting

Course content

12 sections • 129 lectures • 11h 8m total length

  • Preview07:50
  • Preview00:08
  • Preview09:40
  • Multiple choice questions 1
    04:12
  • Accounting Comic Break
    00:15

  • 2 Managerial Accounting Overview
    00:21
  • PDF - 10 Managerial Accounting Introduction
    00:08
  • 10 Managerial Accounting Introduction
    13:03
  • PDF - 20 Cost Classifications
    00:08
  • 20 Cost Classifications
    09:31
  • PDF - 30 Product Costs & Period Costs.
    00:08
  • 30 Product Costs & Period Costs
    16:25
  • PDF - 40 Prime Costs & Conversion Costs
    00:08
  • 40 Prime Costs & Conversion Costs
    05:35
  • PDF - 50 Manufacturer's Balance Sheet
    00:08
  • 50 Manufacturer's Balance Sheet
    03:15
  • PDF - 60 Manufacturer's Income Statement
    00:08
  • 60 Manufacturer's Income Statement
    08:49
  • PDF - 70 Manufacturing Activities Flow
    00:08
  • 70 Manufacturing Activities Flow
    07:51
  • PDF - 80 Just In Time (JIT) Manufacturing
    00:08
  • 80 Just In Time (JIT) Manufacturing
    02:58
  • Multiple choice questions 2
    05:32
  • Accounting Comic Break
    00:16

  • 3 Payback Period & Accounting Rate of Return
    00:47
  • PDF - 210 Payback Period, Accounting Rate of Return, & Net Present Value
    00:08
  • 210 Payback Period, Accounting Rate of Return, & Net Present Value
    17:13
  • Excel Worksheet Download
    00:05
  • Worksheet - 210 Payback period, accounting rate of return net present value of p
    17:13
  • Multiple choice questions 3
    04:22
  • Accounting Comic Break
    00:16

  • 4 Present Value of A Single Amount
    00:40
  • PDF - 350 Present Value
    00:08
  • 350 Present Value
    16:37
  • Excel Worksheet Download
    00:05
  • Worksheet 350 Present Value
    18:52
  • PDF - 352 Present Value Months as Period
    00:08
  • 352 Present Value Months as Period
    03:58
  • Excel Worksheet Download
    00:05
  • Worksheet - 352 Present Value Months
    04:57
  • Multiple choice questions 4
    05:42
  • Accounting Comic Break
    00:15

  • 5 Future Value of A Single Amount
    01:09
  • PDF - 360 Future Value
    00:08
  • 360 Future Value
    12:41
  • Excel Worksheet Download
    00:05
  • Worksheet - 360 Future Value
    15:16
  • PDF - 362 Future Value Months As Period
    00:08
  • 362 Future Value Months As Period
    03:56
  • Excel Worksheet Download
    00:05
  • Worksheet - 362 Future Value Months
    03:17
  • PDF - 363 Future Value vs Present Value
    00:08
  • 363 Future Value vs Present Value
    06:13
  • Excel Worksheet Download
    00:05
  • Worksheet - 363 Present Value vs Future Value
    10:54
  • Multiple choice questions 5
    05:27
  • Accounting Comic Break
    00:16

  • 6 Present Value of An Annuity
    01:16
  • PDF - 365 Present Value Annuity
    00:08
  • 365 Present Value Annuity
    13:50
  • Excel Worksheet Download
    00:05
  • Worksheet - 365 Present Value Annuity
    08:30
  • PDF - 366 Present Value Annuity Months as Period
    00:08
  • 366 Present Value Annuity Months as Period
    03:23
  • Excel Worksheet Download
    00:05
  • Worksheet - 366 Present Value Annuity Months
    04:28
  • Multiple choice questions 6
    05:35
  • Discussion Question 1
    1 question
  • Accounting Comic Break
    00:15

  • 7 Future Value of An Annuity
    01:40
  • PDF - 367 Future Value Annuity
    00:08
  • 367 Future Value Annuity
    11:27
  • Excel Worksheet Download
    00:05
  • Worksheet - 367 Future Value Annuity
    06:55
  • PDF - 368 Future Value Annuity Months
    00:08
  • 368 Future Value Annuity Months
    03:55
  • Excel Worksheet Download
    00:05
  • Worksheet - 368 Present Value Annuity Months
    03:12
  • Multiple choice questions 7
    05:01
  • Discussion Question 2
    1 question
  • Accounting Comic Break
    00:15

  • 8 Present & Future Value Cash Flow Examples
    01:48
  • PDF - 375 Present Value Cash Flow Examples
    00:08
  • 375 Present Value Cash Flow Examples
    14:05
  • Excel Worksheet Download
    00:05
  • Worksheet - 375 Present Value Practice Data
    23:29
  • PDF - 385 Future Value Cash Flow Examples
    00:08
  • 385 Future Value Cash Flow Examples
    09:02
  • Excel Worksheet Download
    00:05
  • Worksheet - 385 Future Value Data Sets
    14:17
  • Multiple choice questions 8
    05:42
  • Discussion Question 3
    1 question
  • Accounting Comic Break
    00:15

  • 9 Introduction to Present Value Terms Used In Capital Budgeting
    01:25
  • PDF - 390 Present Value Terms Used In Capital Budgeting
    00:08
  • 390 Present Value Terms Used In Capital Budgeting
    08:00
  • Excel Worksheet Download
    00:05
  • Worksheet - 390 Present Value Terms For Capital Budgeting
    18:10
  • Multiple choice questions 9
    06:47
  • Discussion Question 4
    1 question
  • Accounting Comic Break
    00:16

  • 10 Net Present Value (NPV)
    01:18
  • PDF - 409 Net Present Value Assumptions
    00:08
  • 409 Net Present Value Assumptions
    02:05
  • PDF - 410 Net Present Value Calculation 2500 Part 1
    00:08
  • 410 Net Present Value Calculation 2500 Part 1
    10:05
  • 411 Net Present Value Calculation 2500 Part 2
    11:09
  • Excel Worksheet Download
    00:05
  • Worksheet - 409 Net present value - Excel (1)
    19:31
  • Excel Worksheet Download
    00:05
  • Worksheet - 411 Pay Back Accounting RR NPV
    33:45
  • Excel Worksheet Download
    00:05
  • Worksheet - 412 Pay Back Accounting RR NPV 2
    19:17
  • Excel Worksheet Download
    00:05
  • Worksheet - 413 Required return on investment
    15:27
  • Multiple choice questions 10
    03:40
  • Discussion Question 5
    1 question
  • Accounting Comic Break
    00:15

Instructor

Robert (Bob) Steele
CPA, CGMA, M.S. Tax, CPI
Robert (Bob) Steele
  • 4.4 Instructor Rating
  • 16,771 Reviews
  • 349,655 Students
  • 97 Courses

Through working with students from many different schools, Mr. Steele has learned best practices for helping people understand accounting fast. Learning new skills and finding the best way to share knowledge with people who can benefit from it is a passion of his.  

Mr. Steele has experience working as a practicing Certified Public Accountant (CPA), an accounting and business instructor, and curriculum developer. He has enjoyed putting together quality tools to improve learning and has been teaching, making instructional resources, and building curriculum since 2009. He has been a practicing CPA since 2005. Mr. Steele is a practicing CPA, has a Certified Post-Secondary Instructor (CPI) credential, a Master of Science in taxation from Golden Gate University, a Bachelor’s Degree in Business Economics with an emphasis in accounting from The University of California Santa Barbara, and a Global Management Accounting Designation (CGMA) from The American Institute of CPA (AICPA).  

Mr. Steele has also authored five books that can be found on Amazon or in audiobook format on Audible. He has developed bestselling courses in accounting topics including financial accounting and QuickBooks accounting software.  

In addition to working as an accountant, teaching, and developing courses Mr. Steele has helped create an accounting website at accountinginstruction, a YouTube channel called Accounting Instruction, Help, and How Too, and has developed supplemental resources including a Facebook Page, Twitter Page, and Podcasts that can be found on I-tunes, Stitcher, or Soundcloud. Mr. Steele's teaching philosophy is to make content applicable, understandable, and accessible.  

Adult learners are looking for application when they learn new skills. In other words, learners want to be able to apply skills in the real world to help their lives. Mr. Steele’s formal accounting education, practical work experience, and substantial teaching experience allow him to create a curriculum that combines traditional accounting education with practical knowledge and application. He accomplishes the goals of making accounting useful and applicable by combining theory with real-world software like Excel and QuickBooks.  

Many courses teach QuickBooks data entry or Excel functions but are not providing the real value learners want. Real value is a result of learning technical skills like applications, in conjunction with specific goals, like accounting goals, including being able to interpret the performance of a business.  

Mr. Steele makes knowledge understandable by breaking down complex concepts into smaller units with specific objectives and using step by step learning processes to understand each unit. Many accounting textbooks cram way too much information into a course, making it impossible to understand any unit fully. By breaking the content down into digestible chunks, we can move forward much faster.  

Mr. Steele also makes use of color association in both presentations and Excel worksheets, a learning tool often overlooked in the accounting field, but one that can vastly improve the speed and comprehension of learning accounting concepts.  

The material is also made understandable through the application of concepts learned. Courses will typically demonstrate the accounting concepts and then provide an Excel worksheet or practice problems to work through the concepts covered. The practice problems will be accompanied by an instructional video to work through the problem in step by step format. Excel worksheets will be preformatted, usually including an answer tab that shows the completed problem, and a practice tab where learners can complete the problem along with a step by step presentation video.  

Mr. Steele makes learning accounting accessible by making use of technology and partnering with teaching platforms that have a vision of spreading knowledge like Udemy.

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