NPV, IRR & PI Explained | Key Tools for Project and Investment Evaluation

In this video, we explain three essential tools for assessing the economic feasibility of projects and investments: NPV (Net Present Value): Helps us determine the real value of future cash flows after discounting them to the present. IRR (Internal Rate of Return): The rate that makes the net present value equal to zero and shows the minimum required return. PI (Profitability Index): Compares the present value of incoming cash flows to the initial project cost. These three tools are widely used by students, investors, and business professionals to understand whether a project is economically viable and to compare different projects before making a decision. Don’t forget to hit the Like 👍 button, subscribe, and turn on the notification bell 🔔 to keep up with more lessons on economics, finance, and investments.