Sign up now
to enroll in courses, follow best educators, interact with the community and track your progress.
Download
Payback Period - Capital Budgeting Techniques (in Hindi)
1,120 plays

More

Heena Malhotra
Believe in Conceptual Learning.

U
Unacademy user
ma'am,business env.ke topics par full flash vedio upload karo.eg.lpg,mrtp, consumer protection act,patent act,and remaining act. why r not giving reply of queries? no issue. I will wait.
Heena Malhotra
a year ago
Soon , Currently I'm working on 2 other subjects :)
time value of money ko explain kradijiye pls smhj ni aya ....
Heena Malhotra
a year ago
Next videos m h :)
Heena Malhotra
a year ago
Check out Next Videos :)
  1. Capital Budgeting Decisions By Heena Malhotra


  2. Payback Period Traditional or Non Discounting Accounting Rate of Return (ARR) Net Present Capital Budgeting Techniques Value (NPV) Profitability Index (PI) Time adjusted or Discounted Cash Flows Internal Rate of Return (IRR) Modified Internal Rate of Return (MIRR) Discounted Payback By Heena Malhotra


  3. Initial Cash Outlay 300000 Annual Cash Inflows 100000 100000 100000 100000 100000 Year 4 By Heena Malhotra


  4. Example:Suppose XVZ Ltd. is analyzing a project requiring an initial cash outlay of 22,00,000 and expected to generate cash inflows as follows: Year Annual Cash Inflows 80,000 60,000 60,000 20,000 By Heena Malhotra


  5. It's payback period shall be computed by using cumulative cash flows as follows Annual Cash Inflows 80,000 60,000 60,000 20,000 Cumulative Cash Inflows 80,000 1,40,000 2,00,000 2,20,000 Year By Heena Malhotra


  6. Suppose if in above case had the initial outlay been2,05,000 then payback period shall be computed as follows Annual Cash Inflows 80,000 60,000 60,000 20,000 Cumulative Cash Inflows 80,000 1,40,000 2,00,000 2,20,000 Year 4 From above table it is clear that payback period shall lie between 3 to 4 years. Since up to 3 years a sum of 2,00,000 shall be recovered balance of 5,000 shall be recovered in the part (fraction) of 4th year computed as follows 20,000 1 5,000 4 Years Thus, total cash outlay of 2,00,500 shall be recovered in 3Y4 years' time By Heena Malhotroa


  7. Projects Payback Period 3 2.5 4 By Heena Malhotra


  8. Payback Period o The payback period of an investment is the length of time required for the cumulative total net cash flows from the investment to equal the total initial cash outlays. At that point in time, the investor has recovered the money invested in the project. By Heena Malhotra


  9. Steps in Payback period technique: (a) The first steps in calculating the payback period is determining the total initial (b) The second step is calculating/estimating the annual expected after-tax net cash 1. When the net cash flows are uniform over the useful life of the project, the number capital investment and flows over the useful life of the investment. of years in the payback period can be calculated using the following equation Total initial capital investment Annual expected after tax net cash flow Pay back periodh By Heena Malhotra


  10. o 2. When the annual net cash flows are not uniform, the cumulative cash inflow from operations must be calculated for each year. The payback period shall be corresponding period when total of cumulative cash inflows is equal to the initial capital investment. o However, if exact sum does not match then the period in which it lies should be identified. After that we need to compute the fraction of the year that is needed to complete the total payback. By Heena Malhotra