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8/3/2019 NPV $ Pay Back
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Centre For :Centre For :-- BUSINESSBUSINESSADMINISTRATIONADMINISTRATION(Central University of (Central University of
Jharkhand) Jharkhand)
PROJECT
REPORT ON
INVESTMENT DECISION BY N.P.V
AND PAY BACK
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MISSION 20
GROUP
PRESENTED BY:-
Submitted to:
MR . RAJU KUMAR DAS
Submitted By:
Ankit
BhushanManish
Prem
Swapnil2nd Semester, 1st Year,2010-2015
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PREFACEPREFACE
´ Any activity becomes creative when thedoer cares about doing it right or doing it betterµ.
Success is what everyone wants to achieve,and all the successful people do not dodifferent things, they do things differently.Development is social economic politicaland spiritual well -being of a society. Withdevelopment in society things change, butstill there are areas where developmenthas not reached.
This project report is totally based onannalysis work done in lab to know theinvestment decision of Microsoft invarious product . This project is developedas a part of curriculum of degree of masterin business administration .
We have tried our best to cover all aboutinvestment decision by the help of n,p,vand pay back method .
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AcknowledgementAcknowledgement--Way to express the gratitudeWay to express the gratitude
´ If practical knowledge carves and sharps thecareer of a person, practical experience polishesit and adds lustre and brilliance to itµ.
The Satisfaction that accompanies thatthe successful completion of any taskwould be incomplete without themention of people whose ceaseless co-operation made it possible.
Above and before all we would like to
Thank our teacher Mr. Raju. Kumar Das,Co-ordinator Mr. C.N.Pavan whosuggested us the topic, assisted andguided us during preparation of thisproject and without him the completion ofthis project would be totally impossible.
Also, we would like to thank our teachers,our batch mates and our family membersfor their help and motivation whichproved to be a major tool in the completionof this project.
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INTRODUCTIONINTRODUCTION
Investment decision is the majorfactor which determine acompany growth or downfall
and in this project we areresearching on the investmentpolicy adopted by Microsoft inlaunching its two OperatingSystem
-Window Vista
-Windows 7
There are many methods exist
for determining investmentdecision but we are workingonly on Net Present Value andPAY Back Period method .
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Definition and Explanation of NetDefinition and Explanation of NetPresent Value (NPV) Method:Present Value (NPV) Method:
Under the net present valuemethod, the present value ofa project's cash inflows iscompared to the present
value of the project's cashoutflows. The differencebetween the present value ofthese cash flows is called "thenet present value". This net
present value determineswhether or not the project isan acceptable investment.
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Payback PeriodPayback PeriodMethod for CapitalMethod for CapitalBudgeting Decisions:Budgeting Decisions:
Learning Objectives of the Article:
Define and Explain paybackperiod.
Determine the payback period foran investment project.
What are the advantages and
disadvantages of Payback method?
Formula / Equation:
Payback period =Investment required / Net annual cash inflow*
Definition and Explanation:
The payback is another method to
evaluate an investment project.The payback method focuses onthe payback period.T he payback period is the length of time that it takes for a project torecoup its initial cost out of the cash
receipts that it generates. T his periodis sometimes referred to as" the timethat it takes for an investment to pay
for itself." The basic premise of thepayback method is that the morequickly the cost of an investment
can be recovered, the moredesirable is the investment. Thepayback period is expressed inyears. When the net annual cashinflow is the same every year, thefollowing formula can be used tocalculate the payback period.
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NPVNPV vsvs Payback MethodPayback Method
Payback, vs npv, ignores anybenefits that occur after thepayback period. It also doesnot measure total incomes. Animplicit assumption in the useof payback period is that
returns to the investmentcontinue after payback period.Payback method does notspecify any requiredcomparison to otherinvestments or investmentdecision making. It indicatesthe maximum acceptableperiod for the investment.While NPV measures the totaldollar value of project benefits.NPV, payback period fullyconsidered, is the better way tocompare with differentinvestment projects.
NPV (Net Present Value) is calculatedin terms of currency while Paybackmethod refers to the period of timerequired for the return on aninvestment to repay the total initialinvestment. NPV, payback, and manyother measurements form a number of
solutions to evaluate project value.
Payback method, vs npv method, haslimitations for its use because it doesnot properly account for the timevalue of money, inflation, risk,financing or other important
considerations. While NPV methodconsiders time value and it gives adirect measure of the dollar benefit ona present value basis of the project tothe firm·s shareholders. NPV is thebest single measure of profitability.
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ConclusionConclusion
After studying all the facts andfigure we conclude that
market of window 7 is verysuccessful as compare towindow vista .Strategiesadopted in both the caseswere same but the majordifference was theinvestment policy which ledto downfall of Vista andgrowth of Windows7.
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BIBLIOGRAPHYBIBLIOGRAPHY
T he completion of the project reportwould not have been possiblewithout the immense support of our faculties, university
administration, and our friends.T he information mentioned inthe report are first hand, fewdetails have been taken from
Wikipedia , Google and classnotes too. All the informationaretotally based on original fact anddata by our group mates.