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Q: Is there a discounted cash flow model available to analyze a potential acquisition?

A: For a time frame of 3 years Net Present Value provides little additional benefit and results in negligible change, as the time frame increases it becomes increasingly relevant. However applying Net Present Value increases the complexity of calculations and tends to make them less intuitive. Therefore base valuations are calculated using the average forecast returns without discounting future cash flows. FYI we have released a browser based valuation model that applies discounted cash flow to determine NPV over extended time frames it is based on the same methodology as the Business Valuation Model and can be assessed from https://bizpep.com/businessanalysis.html . Additional detail on Discounted Cash Flow and Net Present Value can be found at https://bizpep.com/businessanalysis.html .

Question and Answer Item 2058245 - Browse All Question and Answer Items