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LinkedIn Learning

Investment Evaluation

via LinkedIn Learning

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Overview

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Learn three methods to evaluate investments and make smarter financial decisions.

Syllabus

Introduction
  • Welcome
  • Course requirements and structure
1. Investment
  • Components of an investment
  • Investments and economic capital
  • Types of investments
  • Opportunity cost
  • Time value of money
  • Present, future, and terminal values
  • Challenge 1: Determine present, future, and terminal values
  • Solution 1: Determine present, future, and terminal values
  • Real talk: Investments and opportunity costs
  • Evaluation methods
2. Discounted Cash Flow (DCF)
  • What is DCF?
  • Solve for DCF
  • Challenge 2: Calculate DCF over 30 years
  • Solution 2: Calculate DCF over 30 years
  • Pros and cons of DCF
  • Real talk: Discounted cash flows
3. Net Present Value (NPV)
  • The net present value equation
  • NPV using tables
  • Challenge 3: Calculate NPV using table values
  • Solution 3: Calculate NPV using table values
  • A fully worked out example
  • NPV using a Microsoft Excel formula
  • Challenge 4: Calculate NPV using Microsoft Excel
  • Solution 4: Calculate NPV using Microsoft Excel
  • Pros and cons of NPV
  • Real talk: Net present value
4. Internal Rate of Return (IRR)
  • What is IRR?
  • IRR calculation the long way
  • The case of no IRR
  • The case of multiple IRRs
  • IRR using the Microsoft Excel formula
  • Challenge 5: Calculate NPV and IRR
  • Solution 5: Calculate NPV and IRR
  • Pros and cons of IRR
  • Payback period
  • Payback period in Microsoft Excel
  • Challenge 6: Choose a project based on NPV, IRR, and payback period
  • Solution 6: Choose a project based on NPV, IRR, and payback period
  • Real talk: IRR and payback period
Conclusion
  • Next steps

Taught by

Yash Patel

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4.7 rating at LinkedIn Learning based on 660 ratings

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