Lesson Plan

• Explain the meaning of Net Present Value and its role in investment appraisal.
• Calculate NPV for a multi‑year project using a given discount rate.
• Interpret NPV results to recommend acceptance or rejection of a proposal.
• Assess the advantages and limitations of NPV in business decision‑making.

• Projector or interactive whiteboard
• Calculator or spreadsheet software (Excel/Google Sheets)
• Handout with cash‑flow table and NPV formula
• Whiteboard and markers
• Practice worksheet for NPV calculations

Begin with a quick question: why must we consider the time value of money when evaluating investments? Review students’ prior knowledge of cash flows and discounting. Explain that by the end of the lesson they will be able to calculate and interpret NPV to make sound business decisions.

1. Do‑now (5') – Short problem on discounting a single cash flow.
2. Mini‑lecture (10') – Define NPV, present the formula, and discuss its meaning.
3. Guided practice (15') – Walk through the example calculation step‑by‑step using the provided cash‑flow table.
4. Pair activity (12') – Learners complete a new NPV worksheet with different figures, using calculators or spreadsheets.
5. Class discussion (8') – Groups share results, interpret the sign of NPV, and discuss advantages/limitations.
6. Check for understanding (5') – Quick exit quiz (e.g., “If NPV = 0, what does it mean?”).

Recap that NPV shows the expected change in firm value and guides acceptance decisions. Students write one key takeaway on an exit ticket. For homework, assign a short case requiring them to compute NPV and justify their recommendation.