If anyone's confused with the average investment formula, note that if the machine has a salvage value, then only the depreciable cost (which is cost - savlage value) of the machine should be divided by two to ascertain the average net investement, as the salavage money will be recovered only at the end of project life. Additionally, the salvage value remains tied up in the project throughout its life time. Hence, Average investment (where NWC is net working capital) = NWC + Salvage Value + 1/2 (Initial Cost of machine - Salvage Value) = NWC + 1/2 (Initial Cost of Machine + Salvage Value)
Thank you so much sir for explaining all the topics due to corona our college is taking online classes because of that i miss all the topic which the teacher is explaining but you clear all my topics thank you 😊😊once again
Hello sir, There are 3 types of average investment methods 1) total investment method 2) average investment method you taught this method 3) annual basis
Sir you are great before watch this video I did not have any knowledge about ARR now watching this videos I solved many questions from this formulas so that it's truly thankful 😊
Lovely class and thank you so much. Is there any video from you which explains WC Trade receivables discount, factoring, and trade Payables discount including financial costs? The inventories EOQ including Bulk and buffer Stock I found and again thanks so much :) The way you explain is beyond my Online course...
Idk y but my ans are not coming out correctly when i used this formula Ohh wait now its coming actually i didn't read the question properly thats y my ans were not coming out properly Thansk brooo for this simple and understable formula ❤️
Sir some websites have mentioned that the formula is average profit/ initial investment and some have mentioned what you have used in the video... Which one is the correct one sir?
Sir here you tell us that we need Profit Before Tax for calculation of Average Profit but in FM Book by Surender Singh which is Profit after tax . Which one is correct? PBT OR PAT
@@SahebAcademy suppose Times Limited is going to invest in a project a sum of Rs. 3,00,000 having a lifespan of 3 years. Salvage value of machine is Rs. 90,000. The profit before depreciation for each year is Rs. 150000.Calculate ARR?
in third year the inflow is 30,000 , which is lower than the depreciation for that year 32,000, which means you dont have to deduct tax for that year. since, the value will be (2000) before deducting tax
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If anyone's confused with the average investment formula, note that if the machine has a salvage value, then only the depreciable cost (which is cost - savlage value) of the machine should be divided by two to ascertain the average net investement, as the salavage money will be recovered only at the end of project life.
Additionally, the salvage value remains tied up in the project throughout its life time.
Hence, Average investment (where NWC is net working capital)
= NWC + Salvage Value + 1/2 (Initial Cost of machine - Salvage Value)
= NWC + 1/2 (Initial Cost of Machine + Salvage Value)
Great!
You have been a great help in my accounting course by making it more easy and understandable
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Excellent explanation. Even my professor didn't explain like this!
You are amazing! Tutor/lecturer quality of delivery! Bravo’!
Thank You so much sir for teaching ARR in the simple way 👍🙏
Average investment's formula= (Initial Investment - scrap value) /2+ additional NWC. In the particular video You've applied "+ scrap value!?"
Correct
You are brother
In investment formula, + hi hota hai
Correct. It should be minus
@@sanyasinha128nhi - hota hai...dhyan se pda karo
Love the way you explain soo clear❤❤
☺️👍🏼
I'm doing MBA correspondence now. If I read my study material this topic is very complicated. Thank you for simplifying this topic
Thank you so much sir for explaining all the topics due to corona our college is taking online classes because of that i miss all the topic which the teacher is explaining but you clear all my topics thank you 😊😊once again
You are so good, wish everyone can get to see your videos they're so helpful
Nice explain bro don't need to remember formula when i watch your video i remember it logically.
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Your way of explaining is very smooth 👍
Your explanation is complete and very clear thank you sir
Hello sir,
There are 3 types of average investment methods
1) total investment method
2) average investment method you taught this method
3) annual basis
Your lecture is too much helpful to understand this topic clearly.
Superb teaching sir, it's very useful and it's easily understandable..thanks a lot ...may God bless u sir...
Thank You for the Clear explanation ❤ from Sri Lanka
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Ya sheikh why can't you be my teacher....... Thank you so much ..... May Allah give you the highest ranks in Jannah.
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Thank you so much. This helped me a lot with my assignment.
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Most welcome!😊
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very clear
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Thanks😊
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@@SahebAcademy can i know your Instagram account ???.... Please... Please
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Sir plz make video on income tax
Initial investment will be deducted from scrap value and whole will be divided with 2 in order to get #Avg_Investment
it should be Avg.Investment = Initial Investment - Scrap Value [as scrap value goes to cash inflow]
u are wrong here
Why am I getting 1.77 as the answer
14160/800000 x100
=0.0177 x 100
= 1.77
Please reply
sir, you just saved me. otherwise i was gonna get failed. Thank you so much.
Totally understood the whoole thing, I love it. Thank you very much
Sir please upload financial management other chapters too ( TVM , cost of capital , dividend decision and working capital decision ) please.......😢
Thank you for such a sublime and concise explanation.
Doctor Patel mwenyewe.. good work
Thank you so much sir... i really need this type explanation 😍
It was very clear to understand...👌👌🔥🔥
Thanks😊👍
Please make a playlist of videos for MBA
Your videos are really helpfull Sir.Thank you so much.
Sir you are great before watch this video I did not have any knowledge about ARR now watching this videos I solved many questions from this formulas so that it's truly thankful 😊
You are just amazing!!
Thank god I found you! Thank u so muchhh sir
Sir your guidance will really helpful for us
thank you so much for helping me through my exam
Great explanation sir
Of Jo scrap value,yes,then installation initial investment cost,I think so if not mistaken.
Thank you so much for this.. you’ve been of great help
Very good video and information music cartography screen play speech and rest all thing very good 👍 🎶 👌 👏 😊 🙌
Very very helpful video. It make a clear idea on Financial management if you r not from finance background 👍
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watching this now thank you so much sir ❤️
Sir do one video on cash flows and funds flow statement
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Thank u so much ....for these videos....they are very useful 👍
Amazing Sir, very easy to follow
Why didnt you divide the 160000 by 2 as the formula of depreciation says considering absence of scrap value
Very well explained. Thank you sir. appreciated. And subscribed your channel. Thanks A lot. keep going.
Thank you. This video really helped me
Very helpful and easy to understand. Thank You.
Your explanation is just awesome 🙏
Very nice sir..student from kerala
Lovely class and thank you so much. Is there any video from you which explains WC Trade receivables discount, factoring, and trade Payables discount including financial costs? The inventories EOQ including Bulk and buffer Stock I found and again thanks so much :)
The way you explain is beyond my Online course...
Pls clear this confusion some do have wrote average investment= initial investment (-) scrap value...bt u have done addition to scrap value ??
yes my faculty has taught the same "- scrap value" thing
Same
Both are correct.. Different formulas
very clear and simple explain
Excellent video.have you covered whole financial management?
You've explained it really well!!! Thank you Sooo much!
Idk y but my ans are not coming out correctly when i used this formula
Ohh wait now its coming actually i didn't read the question properly thats y my ans were not coming out properly
Thansk brooo for this simple and understable formula ❤️
Omg your voice is awesome....also way of teaching 👍😘
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You are the best sir
Sir some websites have mentioned that the formula is average profit/ initial investment and some have mentioned what you have used in the video... Which one is the correct one sir?
I'm facing same problem.
thankyou sir for teaching us the concept of ARR .
Amazing!!.... Thank you so much.... Where can we get more questions to solve?
Thank you so much Sir… your method is so good
Sir here you tell us that we need Profit Before Tax for calculation of Average Profit but in FM Book by Surender Singh which is Profit after tax . Which one is correct? PBT OR PAT
Thanku so much sir your video is too understanding 🥰🥰
You're welcome dear😊
@@SahebAcademy suppose Times Limited is going to invest in a project a sum of Rs. 3,00,000 having a lifespan of 3 years. Salvage value of machine is Rs. 90,000. The profit before depreciation for each year is Rs. 150000.Calculate ARR?
Sir I am unable to solve this question.Can you please guide that how to solve this problem?
@@SahebAcademy Sar is mein cashflow use kya hoga?
Thank you so much.. god bless you 💗
in third year the inflow is 30,000 , which is lower than the depreciation for that year 32,000, which means you dont have to deduct tax for that year. since, the value will be (2000) before deducting tax
Yes I have the same doubt @sahebacademy
its too much helpful.. thanku uu sir.