-
Present Values 3
-
Lecture1.1
-
Lecture1.2
-
Lecture1.3
-
-
NPV vs. IRR 4
-
Lecture2.1
-
Lecture2.2
-
Lecture2.3
-
Lecture2.4
-
-
Other Profit Measures 4
-
Lecture3.1
-
Lecture3.2
-
Lecture3.3
-
Lecture3.4
-
-
Depreciation 4
-
Lecture4.1
-
Lecture4.2
-
Lecture4.3
-
Lecture4.4
-
-
Cash Flow Challenges 9
-
Lecture5.1
-
Lecture5.2
-
Lecture5.3
-
Lecture5.4
-
Lecture5.5
-
Lecture5.6
-
Lecture5.7
-
Lecture5.8
-
Lecture5.9
-
-
Capital Asset Pricing Model 3
-
Lecture6.1
-
Lecture6.2
-
Lecture6.3
-
-
Risky Debt 3
-
Lecture7.1
-
Lecture7.2
-
Lecture7.3
-
-
Unlevering Equity 3
-
Lecture8.1
-
Lecture8.2
-
Lecture8.3
-
-
Weighted Average Cost of Capital 4
-
Lecture9.1
-
Lecture9.2
-
Lecture9.3
-
Lecture9.4
-
-
Debt Effect Analysis 2
-
Lecture10.1
-
Lecture10.2
-
-
WACC Challenge 2
-
Lecture11.1
-
Lecture11.2
-
-
Relative Valuation 4
-
Lecture12.1
-
Lecture12.2
-
Lecture12.3
-
Lecture12.4
-
-
Forward Contract Valuation 3
-
Lecture13.1
-
Lecture13.2
-
Lecture13.3
-
Measures Part 1
Payback Period
The payback period is so basic that we won’t actually create a model for it. What it says is how long it takes until your original investment is paid back. So if you put 1000 dollars down, and get 500 dollars in year 1,2 and 3 your payback period is 2. You don’t use any discounting for the payback period.
Profitability Index
The profitability index is defined as follows:
Equation
Profitability Index = Present Value of Inflows/Present Value of Outflows
Challenge
Create a profitability index function.
Prev
Introduction
Next
Measures Part 2