Time Value of Money & Capital Budgeting – Present Value

Time Value of Money & Capital Budgeting - Present Value

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…

Language: english

Note: 4.2/5 (225 notes) 54,003 students

Instructor(s): Robert (Bob) Steele

Last update: 2019-05-23

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

  • Introduction
    • Introduction
    • PDF – 110 Capital Budgeting
    • 110 Capital Budgeting
    • Multiple choice questions 1
    • Accounting Comic Break
  • Managerial Accounting Overview
    • 2 Managerial Accounting Overview
    • PDF – 10 Managerial Accounting Introduction
    • 10 Managerial Accounting Introduction
    • PDF – 20 Cost Classifications
    • 20 Cost Classifications
    • PDF – 30 Product Costs & Period Costs.
    • 30 Product Costs & Period Costs
    • PDF – 40 Prime Costs & Conversion Costs
    • 40 Prime Costs & Conversion Costs
    • PDF – 50 Manufacturer’s Balance Sheet
    • 50 Manufacturer’s Balance Sheet
    • PDF – 60 Manufacturer’s Income Statement
    • 60 Manufacturer’s Income Statement
    • PDF – 70 Manufacturing Activities Flow
    • 70 Manufacturing Activities Flow
    • PDF – 80 Just In Time (JIT) Manufacturing
    • 80 Just In Time (JIT) Manufacturing
    • Multiple choice questions 2
    • Accounting Comic Break
  • Payback Period & Accounting Rate of Return
    • 3 Payback Period & Accounting Rate of Return
    • PDF – 210 Payback Period, Accounting Rate of Return, & Net Present Value
    • 210 Payback Period, Accounting Rate of Return, & Net Present Value
    • Excel Worksheet Download
    • Worksheet – 210 Payback period, accounting rate of return net present value of p
    • Multiple choice questions 3
    • Accounting Comic Break
  • Present Value of A Single Amount
    • 4 Present Value of A Single Amount
    • PDF – 350 Present Value
    • 350 Present Value
    • Excel Worksheet Download
    • Worksheet 350 Present Value
    • PDF – 352 Present Value Months as Period
    • 352 Present Value Months as Period
    • Excel Worksheet Download
    • Worksheet – 352 Present Value Months
    • Multiple choice questions 4
    • Accounting Comic Break
  • Future Value of A Single Amount
    • 5 Future Value of A Single Amount
    • PDF – 360 Future Value
    • 360 Future Value
    • Excel Worksheet Download
    • Worksheet – 360 Future Value
    • PDF – 362 Future Value Months As Period
    • 362 Future Value Months As Period
    • Excel Worksheet Download
    • Worksheet – 362 Future Value Months
    • PDF – 363 Future Value vs Present Value
    • 363 Future Value vs Present Value
    • Excel Worksheet Download
    • Worksheet – 363 Present Value vs Future Value
    • Multiple choice questions 5
    • Accounting Comic Break
  • Present Value of An Annuity
    • 6 Present Value of An Annuity
    • PDF – 365 Present Value Annuity
    • 365 Present Value Annuity
    • Excel Worksheet Download
    • Worksheet – 365 Present Value Annuity
    • PDF – 366 Present Value Annuity Months as Period
    • 366 Present Value Annuity Months as Period
    • Excel Worksheet Download
    • Worksheet – 366 Present Value Annuity Months
    • Multiple choice questions 6
    • Discussion Question 1
    • Accounting Comic Break
  • Future Value of An Annuity
    • 7 Future Value of An Annuity
    • PDF – 367 Future Value Annuity
    • 367 Future Value Annuity
    • Excel Worksheet Download
    • Worksheet – 367 Future Value Annuity
    • PDF – 368 Future Value Annuity Months
    • 368 Future Value Annuity Months
    • Excel Worksheet Download
    • Worksheet – 368 Present Value Annuity Months
    • Multiple choice questions 7
    • Discussion Question 2
    • Accounting Comic Break
  • Present & Future Value Cash Flow Examples
    • 8 Present & Future Value Cash Flow Examples
    • PDF – 375 Present Value Cash Flow Examples
    • 375 Present Value Cash Flow Examples
    • Excel Worksheet Download
    • Worksheet – 375 Present Value Practice Data
    • PDF – 385 Future Value Cash Flow Examples
    • 385 Future Value Cash Flow Examples
    • Excel Worksheet Download
    • Worksheet – 385 Future Value Data Sets
    • Multiple choice questions 8
    • Discussion Question 3
    • Accounting Comic Break
  • Introduction to Present Value Terms Used In Capital Budgeting
    • 9 Introduction to Present Value Terms Used In Capital Budgeting
    • PDF – 390 Present Value Terms Used In Capital Budgeting
    • 390 Present Value Terms Used In Capital Budgeting
    • Excel Worksheet Download
    • Worksheet – 390 Present Value Terms For Capital Budgeting
    • Multiple choice questions 9
    • Discussion Question 4
    • Accounting Comic Break
  • Net Present Value (NPV)
    • 10 Net Present Value (NPV)
    • PDF – 409 Net Present Value Assumptions
    • 409 Net Present Value Assumptions
    • PDF – 410 Net Present Value Calculation 2500 Part 1
    • 410 Net Present Value Calculation 2500 Part 1
    • 411 Net Present Value Calculation 2500 Part 2
    • Excel Worksheet Download
    • Worksheet – 409 Net present value – Excel (1)
    • Excel Worksheet Download
    • Worksheet – 411 Pay Back Accounting RR NPV
    • Excel Worksheet Download
    • Worksheet – 412 Pay Back Accounting RR NPV 2
    • Excel Worksheet Download
    • Worksheet – 413 Required return on investment
    • Multiple choice questions 10
    • Discussion Question 5
    • Accounting Comic Break
  • Internal Rate of Return (IRR)
    • 11 Internal Rate of Return (IRR)
    • PDF – 510 Internal Rate of Return IRR
    • 510 Internal Rate of Return IRR
    • Excel Worksheet Download
    • Worksheet – 510 IRR Excel
    • Excel Worksheet Download
    • Worksheet – 511 IRR NPV
    • Multiple choice questions 11
    • Discussion Question 6
    • Accounting Comic Break
  • Break Even Time
    • 12 Break Even Time (BET)
    • PDF – 600 Break Even Time
    • 600 Break Even Time
    • Excel Worksheet Download
    • Worksheet – 600 Pay Back Period & Break Even Time
    • Multiple choice questions 12
    • Accounting Comic Break

 

Time Value of Money & Capital Budgeting - Present ValueTime Value of Money & Capital Budgeting - Present Value

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