In?finance,?discounted cash flow?(DCF) analysis is a common technique of placing value on a project or company. All...

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Finance

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.

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Discounted cash flow is a technique used to derive the net present value of a project to determine if the project will have positive or negative present value For example In case of a building contractorSuppose initial investment in the project if R100000000 Cost of capital is 10 and cash flows during the next 5 years are Year Cash flows 1 5894450000 See Answer

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