What method (IRR, NPV, Payback...) does Canada Goose Holdings Inc. use to make investment or capital budgeting decisions? Is it effective?

 

Answer:

Canada Goose Holdings Inc. use NPV in to make investment decision;

NPV (net present value) is the present value of proposal's net cash flow less the proposal's initial cash outflow. If a project's NPV is greater than or equal to zero the project should be accepted, if it is negative the project should be rejected.

 Steps of calculating NPV

                    I.       Understand the nature of the project and calculate the cash flow for each year.

                   II.       Discount those cash flow based on the discount rate.

                  III.       Add all the discounted cash flow

                 IV.       Selection of the investment based on the accepting criteria

NPV method is effective since it help to determine whether the investment will return the net profit or loss. According to the article in the link below the NPV help the Canada Goose Holdings Inc. to make the investment decision. It can also handle dis counted rates without any problems.

Reference

HARGREAVEAVES LANSDOWN, CANADA GOOSE HOLDING INC (GOODS) NPV; https://www.hl.co.uk/shares/shares-search-results/c/canada-goose-holdings-inc-npv

Oak Spring University, Canada Goose Inc.: At a retail Crossroads Net Present value (NPV)/MBA; https://oakspringuniversity.com/frontpage/npvcase/13786-goose-canada