What formula is used to calculate NPV?
NPV = Σ (CFt / (1+r)^t) - I0, where:
CFt - cash flow in period t
r - discount rate
t - time period
I0 - initial investment costs
This formula allows you to determine the present mexico whatsapp number value of future cash flows and compare them with the initial investment.
What should be taken into account when analyzing the commercial viability of a project?
When analyzing, the following should be considered:
Projected income and expenses
Time value of money
Risks and uncertainties
Alternative uses of resources
Impact of the project on other aspects of the business
Macroeconomic factors
How to evaluate the effectiveness of a project in the early stages when there is little data?
In the early stages you can:
Use data from similar projects
Conduct expert assessments
Apply scenario analysis methods
Use simplified models with subsequent refinement
Focus on key success factors and risks
What methods are used to take risks into account when evaluating performance?
Key risk accounting methods include:
Adjustment of the discount rate
Sensitivity analysis
Scenario method
Monte Carlo Method
Decision tree
Real Options
What is the difference between Internal Rate of Return (IRR) and Modified Internal Rate of Return (MIRR)?
IRR assumes that intermediate cash flows are reinvested at a rate equal to the IRR. MIRR allows you to specify a more realistic reinvestment rate, which often gives more accurate results, especially for unusual cash flows.
How to compare projects with different implementation deadlines?
For a correct comparison you can:
Use the annual equivalent annuity
Bring projects to the same maturity by assuming reinvestment
Apply the return on investment index
Consider multiple cycles of a shorter project
What non-financial factors should be considered when analyzing performance?
Important non-financial factors include:
Strategic alignment with company goals
Potential for developing new competencies
Impact on reputation and brand
Improving relationships with clients and partners
Social and environmental effects
Compliance with legal requirements
How often should performance assessment be reviewed during project implementation?
The frequency of revision depends on:
Project duration and complexity
Dynamics of the market environment
The presence of key stages or milestones of the project
Significant changes in the terms of implementation
It is generally recommended to re-evaluate at least quarterly or when major project milestones are reached.
Continuously improving your assessment and anal