Video: Introduction to Valuation Methods and Models

In this lesson, Nick Palazzolo, CPA, dives into the foundational concepts of valuation, providing an engaging introduction to various methods and models used to calculate the value and profitability of potential business projects. He breaks down the essence of net present value (NPV), demonstrating how to account for costs and revenues over time by factoring in the time value of money. By distilling the process into a relatable explanation of inflows versus outflows, Nick sets the stage for a deeper understanding of valuation. Additionally, he introduces the basic premise behind the rate of return calculations, using clear examples to illustrate how investments are assessed to determine their financial viability, and hints at the more complex considerations, such as taxes and fees, that can affect these calculations. With this lesson, Nick helps unpack the crucial steps toward making informed financial decisions on big-ticket investments and projects.