This 3 minute and 11 seconds video explained this concept so simply that it boggles my mind because I've spent so many damn freaking hours trying to figure this out! agh! Thank you so much! Please continue to make these videos. They're my grade savers!
Nicely explained with the fraction calculation most other sites' explanations are for the full even years payback which is quite rare in the real world.
I've Finance and Managerial A/c exam after 10-12 days and was searching for some assistance on UA-cam to get some insights to solve the problems and luckily stumbled on this video. I'm so glad to find it. Checked out your other videos too. Short videos yet covers the whole thing and your simple explanation has made it a lot easier to get all those exhausting stuffs of the book in my little brain. Subscribing to your channel right away! :)
Thank you for the clear explanation! Would you also please make a video about capital allowance and its relations with depreciation, and as well as the calculation involving working capital?
Thank you kind sir. My professor writes CPA reviews, yet he doesn’t explain anything as clear as this video and other video I’ve watched from this channel. Makes no type of sense.
well explained but the only concern I have with this is that it doesn't "present value" the future year's cash flows or that it assumes that those cashflows have been already PV'ed
Just being greedy if you don't mind, i'm doing valuation exam soon, do you have any videos subject to yp (single ,dual rate) such as layer method ,term& reversion ..etc..
Please what of if the initial investment is #120000 and year 1 is 40000 yr2 50000 cumulative for yr1 40000 added to yr2 90000 the both yr #150000 which is more than the intial do we fine the payback period
Those numbers are given numbers. It's just a prediction for how much money this project will generate in future. In year 1, the project is going to generate $30,000 of profit and the next year generate $40,000 so the total generated profit at end of year 2 is $70,000.
Find out how many weeks 0.2 of a year would be. Using this example; Payback Period is 2.2 years. 0.2 is the same as 1/5 of a year = 2.4 months Because 12 divided by 5 = 2.4 2.4 months is 9.6 weeks So your answer would be 2 years and 9.6 weeks
You make a pretty fundamental mistakes in this video. The whole point of discounting, on which the payback is based, is that $40K received in year 2 is NOT the same as $40K received in year 1; you first need to discount the $40K by one year. What this means is that you CANNOT add the $30K in year 1 to the $40K in year--it's like adding apples and oranges. Hence you premise that you're $10K short after year 2 is flawed, unless the discount rate is zero, which is what you assume. In all real world decisions, however, the discount rate is positive, which means you're more than $10K short coming into year 3. How much short you are depends on the discount rate; the higher the rate, the more short you are.
Wow one 3 minute video explains this better than my finance professors 2 hour lecture. Thank you!
my finance professor genuinely takes knowledge away from me
@@Chiethkeef😂😂
very well explained, I wish I had teachers like you in my college
This 3 minute and 11 seconds video explained this concept so simply that it boggles my mind because I've spent so many damn freaking hours trying to figure this out! agh!
Thank you so much! Please continue to make these videos. They're my grade savers!
I'm happy to help. Thanks for watching Li Lee.
Hours? You dumb af then
I am in middle of a exam
How was it?
Thanks, been getting conflicting responses all week. You finally solved it for me!
you're a savior! thank you, i've always been so confused about this
i'm a vietnamese student, this video is really useful for me to finish my homework, thank you so much
Crisp ,clear to the point video !
It took me hours to get this concept from textbook! It turned out, it is quite simple! Thank you!😂
This is well explained. No effort needed to understand.
Nicely explained with the fraction calculation most other sites' explanations are for the full even years payback which is quite rare in the real world.
This was far better explained than my notes...and it's a lot simpler too
Thank you for brief and straightforward explanation🌸
Wow, this is more elaborate for a first time learner like me. Well understood
You explained in 3 minutes what others took 25 minutes to explain!
😀
Exceptional explanation. Thank you!!!!
You're very welcome!
Thank you! Simply and straight forward explanation really helped me.
I've Finance and Managerial A/c exam after 10-12 days and was searching for some assistance on UA-cam to get some insights to solve the problems and luckily stumbled on this video. I'm so glad to find it. Checked out your other videos too. Short videos yet covers the whole thing and your simple explanation has made it a lot easier to get all those exhausting stuffs of the book in my little brain. Subscribing to your channel right away! :)
Thank you for the kind words!
Thank you for the clear explanation! Would you also please make a video about capital allowance and its relations with depreciation, and as well as the calculation involving working capital?
+Vivi Lin I will definitely put those on my list. I think I made a video about working capital but will need to double-check!
Such a clear explanation
Glad it was helpful!
Very simple explanation,
Thank you very much.
Good explanation. Dont stop, pls continue to share more videos, thanks
Omg thank you so much. You literally saved me.
This was well explained
super helpful and concise. thanks brudhha
This was very helpful!!! Thank you so much!
this is very helpful, thank u so much
Now I understand...thank you sir
This is excellent 💯.... Straight to the point
thank you for this video my friend. keep up the great work you're doing!
Thank you kind sir. My professor writes CPA reviews, yet he doesn’t explain anything as clear as this video and other video I’ve watched from this channel. Makes no type of sense.
ur an angel thank u
Thank you, this is straight forward and to the point x
Great content. Thanks!😁
Thank you
Sure thing!
Thank you sooo much
well that was easy. amount left to pay/initial investment. thank you sir
Happy to help!
well explained but the only concern I have with this is that it doesn't "present value" the future year's cash flows or that it assumes that those cashflows have been already PV'ed
Companies that use the payback method don't always discount the cash flows; this is a disadvantage of the payback method
thanks for the clarification. Can we used discounted CFs to determine the payback period? Are there any drawbacks to this?
Sorry I want to make sure of something
Is the cash flow meaning the NET cash flow ? The cash in minus cash out ? Or cash in ?
Wow
Thank u so much
Thank you!
Thanks
Usually the formula is the initial investment devided by the average annual inflow, so my Q is why didn't u use 80000/ average inflow ?
smh the best expiation so far thank you
Just being greedy if you don't mind, i'm doing valuation exam soon, do you have any videos subject to yp (single ,dual rate) such as layer method ,term& reversion ..etc..
THank you!
how will the calculated payback period change if the whole 50k that is being paid back in the third year is done at the last date of year 3 ?
Thanks dia
Thank u sir 😍😍
Please what of if the initial investment is #120000 and year 1 is 40000 yr2 50000 cumulative for yr1 40000 added to yr2 90000 the both yr #150000 which is more than the intial do we fine the payback period
Should we have to multiple 10000/50000 by 12 for months?
can i please ask if the cash flow your referring to is the annual cash flow or the NET INCOME in the financial statement?
Annual cash flow
urghh thank you! made it so simple
How do we get 2.2..
Hi.. What if they only paid in the 3rd year?
So simple that i thought it was wrong till i went thru the comment section lol
😆
nobody wants to explain payback period unless its an even interger and they spend 5 more minutes than you did thanks
IM STILL CONFUSED
WHERE DID THESE NUMBERS COME FROM HOW ARE YOU SUBTRACTING $30000 IN YR 1 BUT $40000 IN YEAR 2 I DONT UNDERSTAND I NEED HELP[
Those numbers are given numbers. It's just a prediction for how much money this project will generate in future. In year 1, the project is going to generate $30,000 of profit and the next year generate $40,000 so the total generated profit at end of year 2 is $70,000.
What a G
How do you calculate it by weeks though? 2 yrs and X amount of weeks
Find out how many weeks 0.2 of a year would be.
Using this example;
Payback Period is 2.2 years.
0.2 is the same as 1/5 of a year = 2.4 months
Because 12 divided by 5 = 2.4
2.4 months is 9.6 weeks
So your answer would be 2 years and 9.6 weeks
You make a pretty fundamental mistakes in this video. The whole point of discounting, on which the payback is based, is that $40K received in year 2 is NOT the same as $40K received in year 1; you first need to discount the $40K by one year. What this means is that you CANNOT add the $30K in year 1 to the $40K in year--it's like adding apples and oranges. Hence you premise that you're $10K short after year 2 is flawed, unless the discount rate is zero, which is what you assume. In all real world decisions, however, the discount rate is positive, which means you're more than $10K short coming into year 3. How much short you are depends on the discount rate; the higher the rate, the more short you are.
❤
I love u
Worse background and font
Can you just get to the point ?
THANK YOU!
Thank you 😊