Pros and cons of online dating article

17-May-2017 00:20

Net Present Value (NPV), Internal Rate of Return (IRR) and Payback Period are some of the most common metrics used in the calculations of quantified benefits and costs when justifying projects via business cases.Here I take a quick look at each one and the pro's of con's of using these metrics.Later on you can come back and tell us how hard it is being rich. Unless you’re very religious, contrarian, or you’re visiting our planet ahead of the full-scale invasion from Mars, you’ll know how great it is to have money.The esteemed rap poet Nas sums up the general picture as follows: Mr Nas is a bit weak in rhyming the clothes he’s trying with those that he’s buying, but then he doesn’t need to try too hard – Nas knows we’ve all dreamed of being rich. At the very least, being wealthy gets you: Feel free to substitute your own desires. When I said this article was about the pros and cons of being wealthy, I meant it: having a lot of money has drawbacks, especially if you get rich overnight.Our NPV rule tells us to accept all investments where the NPV is greater than zero. Another limitation of the NPV approach is that the model assumes that capital is abundant - that is there is no capital rationing.However, the measure doesn't tell us when a positive NPV is achieved. If resources are scarce, then the analyst has to look carefully at not just the NPV for each project they are evaluating, but also the size of the investment itself.

The IRR can be calculated using trial and error (changing the discount rate until the NPV = 0).Description - Perhaps the mostly widely used technique for analyzing a potential investment opportunity or project is the net present value of cash flow or NPV approach.Using the NPV of cash flow technique we would discount all cash flows in our business case at the opportunity cost of capital - in most cases the weighted average cost of capital for a company.Pros - Accounts for the fact that the value of a dollar today is more than the value of a dollar received a year from now - that's the time value of money concept.The other strength of this measure is that it recognizes the risk associated with future cash flow - it's less certain Cons - Does not give visibility into how long a project will take to generate a positive NPV due to the calculations simplicity.

The IRR can be calculated using trial and error (changing the discount rate until the NPV = 0).Description - Perhaps the mostly widely used technique for analyzing a potential investment opportunity or project is the net present value of cash flow or NPV approach.Using the NPV of cash flow technique we would discount all cash flows in our business case at the opportunity cost of capital - in most cases the weighted average cost of capital for a company.Pros - Accounts for the fact that the value of a dollar today is more than the value of a dollar received a year from now - that's the time value of money concept.The other strength of this measure is that it recognizes the risk associated with future cash flow - it's less certain Cons - Does not give visibility into how long a project will take to generate a positive NPV due to the calculations simplicity.That is cash in the future is not worth as much as much as cash today.