In?finance,?discountedcash flow?(DCF) analysis is a common technique of placing value ona project or company. All of the future?cash flows are projectedand?discounted?by using cost of capital to determine their?presentvalues?(PVs). Adding up all future cash flows, both incoming andoutgoing, provides the?net present value?(NPV).
Respond to thefollowing in a minimum of 175 words:
- Give an example of a situationwhere a building contractor may want to use the discounted cashflow?(DCF) analysis method.
- Discuss a situation where amethod to determine a project’s valuation, other than discountedcash flow?(DCF) analysis, would be favorable.
