From the course: Pre-investing: Before Investing in Real Estate
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Discounted cash flow and the net present value (NPV) - Microsoft Excel Tutorial
From the course: Pre-investing: Before Investing in Real Estate
Discounted cash flow and the net present value (NPV)
- Let me ask you a quick question. Would you rather get $100 right now or get $100 a year from now? All things equal, the answer's really clear, right? You would want $100 right now. Why would you wait a year for that? But let's look at another example. Would you rather take $100 right now or $1000 in 10 years? Now it's kind of more difficult. Maybe some of you might still choose to get the $100 now, but some of you may be willing to wait 10 years in order to get $10,000, and the questions that might go through some of your minds may be well, who's guaranteeing it, and do I have confidence that the person who's going to offer me the 1000 in 10 years is actually going to be able to fulfill on that request? When investors think about the profits coming from an investment, that's one of the things that they've got to grapple with. It's not just how much they're going to make from an investment, but it's when they're actually going to receive those profits. And one of the ways that…
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What makes a good investment?1m 48s
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Discounted cash flow and the net present value (NPV)5m 37s
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Discount rate2m 42s
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NPV demonstration7m 34s
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Measuring efficiency: Internal rate of return (IRR)2m 34s
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IRR demonstration4m 24s
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Measuring magnitude: Cash multiple1m 58s
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How to use the measures6m 3s
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NPV vs. IRR4m 51s
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The terminal value of an indefinitely held rental5m 53s
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Investment yields and capitalization rates8m 38s
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Measures of return summary7m 49s
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