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Essay Available:
Pages:
2 pages/≈550 words
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2 Sources
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.S.)
Document:
MS Word
Date:
Total cost:
$ 10.53
Topic:

The Net Present Value (NPV)

Essay Instructions:

Reading about Net Present Value (NPV) for this module, you probably thought of it as a technique used only by corporations. But the technique may also apply to your own purchases.
You may have heard a salesperson tell you, “This product pays for itself!” While this is probably rare for most products, sometimes there are future savings from certain products that will offset some of the costs. For example, if you buy a newer, more reliable, and more fuel-efficient car, it may save you on repair bills and gas prices compared with your old car. If you are a coffee connoisseur, buying a $100 espresso machine might save you money compared with constantly buying $4 drinks at your local Starbucks.
Think of a purchase you are planning to make or have recently made. How much did it cost? How much per year do you think you will save from this purchase, and for how many years will you get these savings? Estimate the present value of the savings, and subtract the cost of the product. Note that it is rare that any purchase will “pay for itself” (e.g., have a positive NPV). But are the savings enough that the product becomes a lot “cheaper” and more worthwhile for you to buy?

Essay Sample Content Preview:

Net Present Value
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The main essence of investments is to make profits. The Net Present Value (NPV) can be defined as the significant increment in one’s investment over time (Girardin & Skowronski, 2023). It is the amount of profit that would be made by a particular piece of investment later. It is done by looking at the cash flows that investment will accrue over time (Fernando, 2023). There is always the need to look at the amount that one can save, either today or in the future, to cut costs. Every coin saved goes a long way in ensuring financial prudence and management with the current economic situation. The NPV is handy in helping one to see whether a given piece of investment will be profitable later.
In my case, I managed to take up the services of a new company that provides an all-in-one package of internet and TV services. The package provides some TV channels, though only some of the needed ones; I can at least enjoy the news and cartoon channels for me and any young ones, respectively. Given my busy schedule, I do not need so many TV channels since I am mostly out of the house. I love watching the news to be current on what is happening worldwide. In case of any additional TV channels, there is also an additional fee of $10 per month. The only additional costs are the initial setup fees, which add up to a one-off cost of $100.
As for the internet services, the package offers stable internet, though it is capped at around 40 GB every mo...
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