Advanced Business Calculations: A Comprehensive Overview

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Calculation Type Formula Example
Net Present Value (NPV) (Cash inflow / (1 + r)^t) - Initial Investment $1000 / (1 + 0.05)^1 - $900 = $95
Internal Rate of Return (IRR) IRR is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero. IRR = 10%
Payback Period Initial Investment / Annual Cash Inflows $900 / $100 = 9 years

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Source: Data compiled from various financial textbooks and industry reports.