Session 14 (Undergraduate): Time Weighted Returns & Equity Analysis

In today’s session, we started by looking at two measures of time-weighted cash flow returns, NPV and IRR. We then looked at three tools for dealing with uncertainty: payback, where you try to get your initial investment back as quickly as possible, what if analysis, where the key is to keep it focused on key variables, and simulations, where you input distributions for key variables rather than single inputs. Ultimately, though, you have to be willing to live with making mistakes, if you are faced with unc