This week we move on to the twin brother of NPV – The Internal Rate of Return or IRR.
I was surprised at the variation in the results submitted. It highlighted to me the scope for misinterpretation and error in the calculation of something as apparently simple as an NPV.
Net present Value (NPV) is a key metric used by investors to calculate the attractiveness of a potential investment.
Colour is a transparent and effective way to communicate meaning within excel models.
It’s good to get the model ‘out there’ so decision makers can see what is really going on and not just the headlines.
A flexible financial model will be able to evolve to meet the changing requirements of business rather than dying as its environment changes.
So what happens to all that spare thinking time? Where does it go?
It may well be, and very often is the case that the model is right, but you have to be able to explain what is going on
Both learning methods are continually compared and contrasted, and both have their fervent-supporter camps. But one has to be better than the other, right??