Posted by Randy on .
How do I figure out Capital Budgeting in easy to understand terms. Example Cashflow is -$500,000 and the discount rate is 0%, what is the projects net present value?
Fin301 Economics -
I am not an accountant; so I tend to avoid questions that apply certain accounting principals. That said, concepts in most disciplines can be understood with simple common sense. Don't make things more complicated than they really are. Second, don't panic. Do a little research and ask for help when you need it. For example, googling "cashflow defined" would give several hits providing the definition of cashflow. I personally like hits to Wikipedia for quick explanations.
Take it from here: google "cashflow defined" and "net present value, defined", and "discount rate, defined"