Net present value and Peer coaching: Difference between pages

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imported>Doug Williamson
(Standardise calculation presentation.)
 
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(NPV).  
''Working effectively with others''.


1.
Peer coaching takes place between individuals who regard each other as equals.


The total [[present value]] of all of the cash flows of a proposal - both positive and negative - netting off negative present values against positive ones.  
To ensure confidentiality and trust, the coach is external to any line manager or direct report relationships.


For example, the expected future cash inflows from an investment project LESS the initial capital investment outflow at Time 0.


==See also==
*[[Coach]]
*[[Coachee]]
*[[Coaching]]
*[[Coaching applications]]
*[[Coaching techniques]]
*[[Contracting]]
*[[Developmental coaching]]
*[[European Mentoring & Coaching Council]]
*[[Executive coaching]]
*[[GROW]]
*[[Health and wellness coaching]]
*[[International Coach Federation]]
*[[Leadership coaching]]
*[[Line manager]]
*[[Managerial coaching]]
*[[Mentor]]
* [[Organizational coaching]]
*[[Peer]]
* [[Peer-to-peer]]
*[[Skills and performance coaching]]
*[[Team coaching]]
*[[TGROW]]
*[[Working effectively with others]]


<span style="color:#4B0082">'''Example'''</span>


A project requires an investment today of $100m, with $120m being receivable one year from now.
==Other link==
 
*[https://www.treasurers.org/node/307760 How to pick the right executive coach, Association of Corporate Treasurers]
The cost of capital (r) is 10% per annum.
 
 
The NPV of the project is calculated as follows:
 
 
PV of Time 0 outflow $100m
 
= $(100m)
 
 
PV of Time 1 inflow $120m
 
= $120m x 1.1<sup>-1</sup>
 
= $109.09m
 
 
NPV = -$100m + $109.09m
 
= +$9.09m
 
 
 
2.
 
In simple ''Net Present Value analysis'' the decision rule would be that:
 
(1) All positive NPV opportunities should be accepted.
 
(2) All negative NPV opportunities should be rejected.
 
 
So the project in the example above would be accepted - on this basis - because its NPV is positive, namely +$9.09m.
 
 
However this assumes the unlimited availability of further capital with no increase in the cost of capital.
 
A more refined decision rule is that:
 
(1) All negative NPV opportunities should still be rejected; while
 
(2) All positive NPV opportunities remain eligible for further consideration (rather than automatically being accepted).
 
 
== See also ==
* [[Capital rationing]]
* [[CertFMM]]
* [[Discounted cash flow]]
* [[Economic value added]]
* [[Internal rate of return]]
* [[Investment appraisal]]
* [[Present value]]
* [[Residual theory]]
* [[Weighted average cost of capital]]

Revision as of 19:20, 9 October 2023