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Investment Decisions Using NPV. Storytelling Presentation – Riya’s Café.
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Meet Riya ☕. Riya is a young entrepreneur who dreams of opening her café. She has two choices: 🏬 Mall Café 🎓 College Café But which option is better?.
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What is NPV? 💡. Net Present Value (NPV) helps us know whether an investment is profitable. Formula: NPV = Present Value of Cash Inflows – Initial Investment Decision Rule: ✅ NPV > 0 → Accept Project (Profitable) ❌ NPV < 0 → Reject Project (Not Profitable).
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Option 1: Mall Café 🏬. • Initial Investment: ₹10,00,000 • Future Inflows: ₹15,00,000 • Discount Rate: 10% Calculated NPV = –₹0.5 lakhs ❌ (Not Profitable).
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Option 2: College Café 🎓. • Initial Investment: ₹8,00,000 • Future Inflows: ₹12,00,000 • Discount Rate: 10% Calculated NPV = +₹1.2 lakhs ✅ (Profitable).
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Riya Chooses 🎉. 👉 Riya selects the **College Café** option. ✔ Positive NPV = Profitable Investment ✔ Safer and smarter financial decision.
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Key Takeaway 📌. • NPV is a simple yet powerful investment decision tool. • Always choose projects with Positive NPV. • Avoid projects with Negative NPV to reduce risks..
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Thank You 🙏. Storytelling Video Assignment – LPU #MSOB #QD06 #CORPORATEFINANCE #LPU #DrBasit #FinancewithAI.